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BAILII case number: [1992] UKEAT 29_91_2611

Appeal No. EAT/29/91

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 28 & 30 September 1992 and 26 November 1992

Judgment delivered on 16th March 1993

Before

THE HONOURABLE MR JUSTICE WOOD MC (PRESIDENT)

MISS C HOLROYD

MR J D DALY

BRITISH COAL CORPORATION APPELLANT

MRS E SMITH & ORS RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant Mr N Underhill QC

Mr B Thanki

(of Counsel)

Messra Nabarro Nathanson

The Lodge

South Parade

Doncaster DN1 2DQ

For the Respondents Mr M Beloff QC

Mr J McMullen

(of Counsel)

Messrs Gregory Rawcliffe & Milners

1 Bedford Row

LONDON WC1R 4BZ

Mr P Todd

Solicitor

Mesrs Hopkins & Sons

Eden Court

Crow Hill Drive

Mansfield NG19 7AE

MR JUSTICE WOOD (PRESIDENT) Between December 1985 and April 1988 a total of 1,286 Applicants (who were all either canteen workers or cleaners) submitted individual applications claiming that they carried out work of equal value with some 150 comparators (who were all either surface mine workers or clerical workers).

It is common ground that the relevant date for considering the facts of these cases on the preliminary issues was to be 1st January 1986. The Applicants rely upon the provisions of the Equal Pay Act 1970 (as amended) and not upon EEC law direct. Of the Applicants - 1,215 (members of the NUM) are represented through Messrs Milners; and 71 (members of the UDM) are represented through Hopkin & Son. At the hearing British Coal Corporation (BCC) and the NUM Applicants were represented by leading counsel and the UDM Applicants by their solicitor.

This case has not only proved difficult in law but the surrounding circumstances have also caused us grave disquiet.

There are five grades of canteen worker. The breakdown so far as NUM Applicants were concerned was as follows -

Canteen attendants (836 and 20 comparators): cashiers (21 and a further 16 comparators); assistant cooks (83 and a further 7 comparators): cooks (96 and a further 7 comparators): and manageresses (150 and a further 10 comparators.) There were 20 cleaners who identified 11 comparators, some of whom had also been chosen by canteen workers. All the comparators were mineworkers - almost all were surface work grades and the great majority was with mineworkers in Grade S6 (the lowest surface work grade).

The figures for the UDM Applicants are not quite so clearly identified but these applications involve a substantial number of comparisons. All the comparators were surface mineworkers save one who was a clerical worker and their total was 76.

The Industrial Tribunal posed the issue before them thus in paragraph 1 of the Decision.

"... As a result of previous interlocutory hearings, and in particular that held on 28 October 1988, the Originating Applications of all applicants were listed together before us to resolve two preliminary issues, a course provided for by Rule 8(2E) of the Complementary Rules of Procedure set out in Schedule 2 to the Industrial Tribunals (Rules of Procedure) Regulations 1985:-

a.whether the applicants who have named comparators who do not work at the same establishment as they do are in the "same employment" as those said comparators for the purposes of section 1(6) of the Equal Pay Act 1970 ("the Act"), and

b.whether the respondent can succeed at the preliminary stage with a "genuine material factor" defence under the provisions of section 1(3) of the Act based upon separate wage structures."

The case was heard over 11 days during September 1990 at the end of which the Industrial Tribunal decided in favour of the Applicants on each issue. BCC now appeal.

By 30th September 1992 only 215 applicants were still employed by BCC. 208 NUM and 7 UDM. They are employed at 47 establishments, 39 of which are collieries and 8 are other establishments.

At paragraph 3 of the Decision the Industrial Tribunal say this -

"3. Before dealing with the issues before us, we should comment upon the progress of these cases thus far. The bulk of applications were filed by mid-1986 yet it is only now that these Tribunals begin to hear them; they are, even so, only at a preliminary stage and we, from our experience of the time taken for the preparation of expert reports in equal value cases, fear that it may well take up to five years for reports to be prepared, given the number of applicants and comparators and the individual nature of each claim. By that time (given the age range of claimants) it is statistically likely that many will have died; these claims, perhaps uniquely among those in this field which have reached a Tribunal hearing, therefore illustrate the procedural difficulties which face those who seek to pursue multiple claims under English law, quite apart from the delay inherent in the pursuit of claims under the Equal Pay Act where the preparation of an independent expert's report may be required. Others far more eminent than ourselves have criticised the Act, its drafting and the "minefield" which it has created, apparently without success; we would add that it cannot be either just or right if workers have rights which are rendered virtually unenforceable because of the law's delays. We put forward, at paragraph 30 of this decision, suggestions for the future progress of these cases in the hope that they may be resolved in a more sensible, and just, timescale."

The pleadings in this case took some time to complete and run to some 300 pages. The financial stakes are high and there seems little doubt that these difficult decisions will be taken higher. In due course a vast number of comparisons are likely to be necessary and thereafter the reports of any experts seem certain to be the subject of attack. The costs upon each side must be enormous. A realistic estimate indicates that these cases are unlikely to be completed (including the appellate process) for another five years or more.

The picture which this case presents to us seems to be the nightmare scenario envisaged by Lord Bridge in Leverton p.65 (infra) at "B" where he said:-

"I cannot leave this case without adding a word about the procedures involved in equal value claims under section 1(2)(c) of the Act of 1970. If such a claim is referred to an expert under section 2A, the expert's job evaluation and the subsequent procedural steps which follow the presentation of his report under the special rules of procedure governing equal value claims in Schedule 2 to the Industrial Tribunals (Rules of Procedure) Regulations 1985 will involve a lengthy, elaborate and, I apprehend, expensive process. The larger the number of comparators whose jobs have to be evaluated, the more elaborate and expensive the process is likely to be. Here, as already mentioned, the appellant spread her net very widely by claiming equality with eleven comparators. But by the time the case reached the House, your Lordships were told that, if her appeal succeeded, she would only seek a reference to an expert in relation to four of the original comparators. This only goes to show what a lot of time and money would have been wasted if the matter had proceeded on a reference to an expert with respect to all the eleven comparators. I do not in any way criticise the industrial tribunal in this case for deciding under section 2A(1)(a) that they could not be satisfied that there were no reasonable grounds for determining her work to be of equal value with any one of the comparators. But i think that industrial tribunals should, so far as possible, be alert to prevent abuse of the equal value claims procedure by applicants who cast their net over too wide a spread of comparators. To take an extreme case, an applicant who claimed equality with A who earns £X and also with B who earns £2X could hardly complain if an industrial tribunal concluded that her claim of equality with A itself demonstrated that there were no reasonable grounds for her claim of equality with B."

The industrial members of the Employment Aappeal Tribunal (EAT) together with the judge form an integral whole. Each member is of equal standing. The value and importance of its decisions and opinions gain from an amalgam of experience and views. It is the application of existing law within the framework of human relations and within the concept of good industrial relations which is so formidable and so important a task. It is pertinent to emphasise that employment law in all its facets - including discrimination - can affect not only the individual, but also the whole economic base of a family. This is the more so within the framework of high unemployment. As can be seen from time to time in judgments of the EAT, the lay members are prepared to express views independently of the judicial member and on occasions at issue with the judicial view. There is recent recognition of this in the House of Lords. That is an important part of their function and indeed their duty.

It has become apparent to those sitting with me in this case, and indeed their views are shared by other lay members, that it is not only the substantive law which has an impact on individuals in the sphere of Industrial Relations, but also the procedural laws. There are procedures now existing which in their judgments are fouling the proper administration of the law within this sphere and in danger of souring the whole. We have in the past poured strictures upon those relevant to equal value claims. The present procedure allows tactical manoeuvring by an employer, just as citation of such numerous comparators is capable of being an oppressive tactic of applicants, in many cases supported by their Trade Unions. It could all form part of a strategy of industrial pressure.

Industrial Tribunals are grossly over-burdened with a vast increase in work and the EAT is gradually becoming swamped. This appeal has had to wait over two years, and it is now seven years since these proceedings were initiated by the Applicants.

Although not strictly relevant to the issues in this case, the problems of litigants being required to approach different jurisdictions depending upon whether their claim is for unfair dismissal or wrongful dismissal or some other contractual remedy likewise causes delays, expense and frustration. It is wasteful of limited resources.All litigants find it difficult to understand the need for separate proceedings in separate jurisdictions or indeed the need for the complicated procedures which are involved in equal value claims. It is fortunate that some aspects of this criticism are to be considered in proposed legislation now before Parliament.

The delays, the complications of procedures, the need to bring separate actions in separate jurisdictions, the overall suitability of our present tribunal procedures and practices, indeed the structure of our present systems of jurisdiction in this field have brought the industrial members of this Tribunal to the grim realisation that unless something is done, and quickly, the present unsatisfactory position will become totally unacceptable. In prevailing upon me to state their views publicly in this judgment they realise fully that this is not a matter strictly within the jurisdiction of this Appeal Tribunal, but just as it is within their province to express both critical and constructive criticism of industrial relations practices, principles and customs, so they have taken the considered view, both those sitting on this appeal with me together with many others, that it behoves them to express their views in a situation where they are convinced that the existing legal system is working against the present and future best interests of the individuals concerned and of industrial relations generally. Furthermore it seems to them that unless something is done the will of Parliament in its efforts to provide expeditious decisions in the field of Employment Law, is likely to be frustrated. Having expressed their criticisms, they turn to myself and to those in the administration for remedies.

Having heard more appeals than perhaps many of the industrial members, I accept and endorse their criticisms. Their views largely coincide with my own. The present unsatisfactory situation must be recognised, needs to be discussed publicly, and merits the most urgent consideration. It has been adversely criticised recently in a Report of the European Commission of Human Rights in Application 15058/89 - DARNELL v. THE UNITED KINGDOM. I would only add that looked at historically, the whole of our industrial law has reached the stage - after some 21 years - where its procedures and jurisdictions need to take a positive step forward. A decisive rethink and a decision are necessary. Stitching and patchwork will only exacerbate the situation. The whole system requires a prompt and thorough review. No doubt practitioners, academics and other interested bodies will be able to contribute to the debate. Much is already in place and the additional cost would seem to be moderate. The need is FOR the restructuring of the skeletal organisation of jurisdictions and the redrafting of Rules, rather than changes in the substantive law to which our comments relate. The substantive law has political relevance and I have advised the lay members that this is not for us. However our collective experience can readily supply a number of suggestions, which we believe could lead not only to expedition through simplification and flexibility of procedure, but also lead to a substantial improvement in the employment of resources.

We return to consideration of the present case. As the issues concern the detailed examination of the wording of Section 1 of the Equal Pay Act it is as well that we set them out at this juncture.

"1Requirement of equal treatment for men and women in same employment

(1) If the terms of contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one.

(2) An equality clause is a provision which related to terms (whether concerned with pay or not) of a contract under which a woman is employed (the "woman's contract"), and has the effect that -

(a) ...

(b) ...

(c)where a woman is employed on work which, not being work in relation to which paragraph (a) or (b) above applies, is, in terms of the demands made on her (for instance under such heading as effort, skill and decision), of equal value to that of a man in the same employment -

(i)if (apart from the quality clause) any term of the woman's contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii)if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefitting that man included in the contract under which he is employed, the woman's contract shall be treated as including such a term.

(3) An equality clause shall not operate in relation to a variation between the woman's contract and the man's contract if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex and that factor -

(a)in the case of an equality clause falling within subsection (2)(a) or (b) above, must be a material difference between the woman's case and the man's; and

(b)in the case of an equality clause falling within subsection (2)(c) above, may be such a material difference.

(4) ...

(5) ...

(6) Subject to the following subsections, for purposes of this section -

(a) - (c) ...

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 Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes."

The leading case is Leverton v. Clwyd County Council [1989] ICR 33, and we do not feel that it is necessary to consider earlier authorities. At p.43D Lord Justice May has this to say -

"The proper construction of section 1(6) has given rise to a considerable difference of opinion in the course of this litigation. I do not find this surprising, because as a piece of drafting this subsection, and indeed other parts of the Act, do not possess the clarity which one might have hoped for and expected. The statute is concerned with terms and conditions of work of employees and should be drafted with that clarity which would enable both sides to a contract of employment to know without difficulty what their rights are."

Of that same subsection Lord Bridge in the House of Lords in the same case says -

"It seems to me, first, that the language of the subsection is clear and unambiguous."

We share the problems of May LJ and wish we had the perspicacity of Lord Bridge of Harwich.

The problems raised by the wording of Section 1(6) were considered for the first time by the superior courts in Leverton. The minority judgment of May LJ in the Court of Appeal eventually found favour with the House of Lords in the leading speech of Lord Bridge. On the facts in Leverton the applicant had no comparator at her own establishment and there was in existence the "Purple Book" which provided common terms and conditions of employment for all employees of the County Council. Hence it was applied "generally". On both grounds the facts of the present case differ. Leverton is not therefore directly binding upon us, but it must be a guide to our thinking and we intend to approach our consideration of Section 1(6) with that guidance in mind.

We believe that the original intention of Parliament may have been that an applicant should have the right to pick a comparator within his or her own establishment (establishment "X") and only if there was no appropriate comparator in the chosen class for comparison, should it be permitted to seek a comparator in an associated establishment. This thought seems to have crossed the mind of May LJ in Leverton at p.44B.

If this was in the mind of the Legislature, then it is easy to see that if one is searching for a statutory definition of "the same employment", one would look for the establishment (establishment "Y") where a similar comparison could take place as if a suitable comparator had existed at establishment "X".

The first test is to ensure that both the applicant and her comparator are typical of their respective groups. There should be no personal factor such as "red circling", which affects their terms and conditions of employment. They must not be "rogues", per May LJ in Leverton at p.45E -

"Otherwise either the woman or the man, or both, might be a `rogue' enjoying uncommon terms and conditions of employment, possibly because of the particular establishment in which they work."

It is for this reason that we used the word "suitable" in the previous paragraph.

Secondly, one looks to see whether in relation to the applicant's class in establishment "X", and the same class at establishment "Y", common terms and conditions of employment are observed. This is on the assumption that common terms and conditions of employment are not observed "generally", as in Leverton.

Thirdly, upon the same assumption; one looks to see whether in relation to the comparator's class at establishment "Y" and that same class at establishment "X" common terms and conditions of employment are observed.

It is only if these tests are satisfied that it is fair to compare, on a like with like basis, a member of the applicant's class at establishment "X", with a member of the comparator's class at establishment "Y". She would have had the same comparison with comparator's class at her own establishment "X". But the man in that class at establishment "X" might be a "rogue" as explained above. Otherwise why does the applicant not pick him as comparator? The Act is dealing with discrimination, not with wage fixing.

We can see possible problems in the future where on the facts of a case there is either no class of which the applicant is a member at establishment "Y" or no class of which the comparator is a member at establishment "X". Whether such a situation could be said to fall within Section 1(6) at all seems arguable, but that is for the future and we would only seek to reiterate the words of May LJ at p.40G:

"But if the time does come for fresh or amending legislation in this field of modern employment law then I have no doubt that the opportunity should be taken to improve and clarify the Act of 1970."

The views which we have just expressed derive support from the reasoning of May LJ and Lord Bridge in Leverton - even though our precise issue did not arise in that case. It seems to us that the most useful passages are to be found at p.44H - per May LJ.

"In other words, the object of section 1(2)(c) and 1(6) is to ensure that a woman doing work of the same value "in the same employment" enjoys equal terms and conditions. If the woman and the man are employed by the same or an associated employer at the same establishment then they are, well understandably, to be treated as in the same employment under the first two lines of the last phrase of section 1(6). In this instance no question of common terms and conditions is relevant to the question whether they are in the same employment. If their work is of equal value and they work in the same establishment, then if their terms and conditions of employment are the same the woman will have no claim. If they are not then she will have one.

It may be, however, that the man to whose work the woman alleges her work for the same or any associated employer is of equal value may be employed at a different establishment of the employer or associated employer. Then she is to be treated as in the same employment as the man if her establishment and his establishment are in the same concern and if at those establishments (this follows from the use of the words "at which" in the subsection) common terms and conditions are observed either generally or for employees of the relevant classes, that is to say, the class of employee of which the woman is a member and the class of which the man is a member. Before the woman can have an equality claim there must, either throughout the employer's business, or at least in relation to the classes of employee to which each belong, uniformity of employment. A woman working in an establishment A, ex hypothesi doing work of the same value as the man, cannot have an equality claim in respect of that man working in establishment B, cannot to that end claim to be in the same employment as the man, unless at least she and her fellow employees doing the same work in establishment A and the man and his fellow employees doing the same work in establishment B each are subject to common terms and conditions. Otherwise either the woman or the man or both might be a "rogue" enjoying uncommon terms and conditions of employment, possibly because of the particular establishment in which they work."

The other passage to which we would refer is from the speech of Lord Bridge of Harwich in the House of Lords at p.59C - p.60E.

"...It poses the question whether the terms and conditions of employment "observed" at two or more establishments (at which the relevant woman and the relevant men are employed) are "common," being terms and conditions of employment observed "either generally or fro employees of the relevant classes." The concept of common terms and conditions of employment observed generally at different establishments necessarily contemplates terms and conditions applicable to a wide range of employees whose individual terms will vary greatly inter se. On the construction of the subsection adopted by the majority below the phrase "observed either generally or for employees of the relevant classes" is given no content. Terms and conditions of employment governed by the same collective agreement seem to me to represent the paradigm, though not necessarily the only example, of the common terms and conditions of employment contemplated by the subsection.

But if, contrary to my view, there is any such ambiguity in the language of section 1(6) as to permit eh question whether a woman and men employed by the same employer in different establishments are in the same employment to depend on a direct comparison establishing a "broad similarity" between the woman's terms and conditions of employment and those of her claimed comparators, I should reject a construction of the subsection in this sense on the ground that it frustrates rather than serves the manifest purpose of the legislation. That purpose is to enable a woman to eliminate discriminatory differences between the terms of her contract and those any male fellow employee doing like work, work rated as equivalent or work of equal value, whether he works in the same establishment as her or in another establishment where terms and conditions of employment common to both establishments are observed. With all respect to the majority view which prevailed below, it cannot, in my opinion, possibly have been the intention of Parliament to require a woman claiming equality with a man in another establishment to prove an undefined substratum of similarity between the particular terms of her contract and him as the basis of her entitlement to eliminate any discriminatory differences between those terms.

On the construction of section 1(6) which I would adopt there is a sensible and rational explanation for the limitation of equality claims as between men and women employed at different establishments to establishments at which common terms and conditions of employment are observed. There may be perfectly good geographical or historical reasons why a single employer should operate essentially different employment regimes at different establishments. In such cases the limitation imposed by section 1(6) will operate to defeat claims under section 1 as between men and women at the different establishments. I take two examples by way of illustration. A single employer has two establishments, one in London and one in Newcastle. The rates of pay earned by persons of both sexes for the same work are substantially higher in London than in Newcastle. Looking at either the London establishment or the Newcastle establishment in isolation there is no sex discrimination. If the women in Newcastle could invoke section 1 of the Act of 1970 to achieve equality with the men in London this would eliminate a differential in earnings which is due not to sex but to geography. Section 1(6) prevents them from doing so. An employer operates factory A where he has a long standing collective agreement with the ABC union. The same employer takes over a company operating factory X and becomes an "associated employer" of the persons working there. The previous owner of factory X had a long standing collective agreement with the XYZ union which the new employer continues to operate. The two collective agreements have produce quite different structures governing pay and other terms and conditions of employment at the two factories. Here again section 1(6) will operate to prevent women in factory A claiming equality with men in factory X and vice versa. These examples are not, of course, intended to be exhaustive. So long as industrial tribunals direct themselves correctly in law to make the appropriate broad comparison, it will always be a question of fact for them, in any particular case, to decide whether, as between two different establishments, "common terms and conditions of employment are observed either generally or for employees of the relevant classes." Here the majority of the industrial tribunal misdirected themselves in law and their conclusion on this point cannot be supported."

What is one to understand by "Terms and Conditions of Employment"? They certainly include pay - see Section 1(2) and Section 7 of the 1970 Act and "the method of calculating remuneration" see Section 1(3)(a) of the 1978 Act.

Bearing in mind the guidance given in Leverton it would seem that in considering commonality, there are two factors which are particularly relevant. The first is the derivation or basis upon which one arrives at the details of terms and conditions. This is clearly relevant - "... There may be perfectly good geographical or historical reasons why a single employer should operate essentially different employment regimes at different establishments. In such cases the limitation imposed by section 1(6) will operate to defeat claims under section 1 as between men and women at the different establishments. ...".

Secondly, the influence of "geography". Taking the examples given by Lord Bridge it seems to us that he is there emphasising the geographical factor as constituting a difference in the common terms and conditions. The rates of pay may be different and will provide a defence under S.1(3), but it seems he would also indicate that because of that difference in pay due to locality that the applicant and comparator were not in the same employment. Likewise in his second example, if in fact the basis upon which the terms and conditions were agreed is a different basis because of being in a different locality, then that again would prevent sufficient comparison between the applicant and her comparator. That this was the indication being given by his Lordship seems also to be supported by the note of the argument being submitted for the Appellants, see [1989] 1 AC at 731C where this submission appears -

"On the true construction of the subsection, the issue is whether common terms and conditions apply across the relevant establishments, that is, whether the terms and conditions for the person performing the particular job done by the applicant differ according to the establishment at which that person is employed, and whether the terms and conditions of the persons do the job of the male comparables differ according to the establishments at which they are employed. In other words are the terms and conditions applicable to the relevant jobs irrespective of the establishment at which the employees work?"

and later at p.733A the submission runs -

"It follows therefore that section 1(6) is directed not to a comparison of the terms of the applicant and the male comparables. Rather it is directed to whether a person doing a specific job receives different terms and conditions by reason of the establishment at which, he or she is employed, or whether as in the present case, the terms and conditions are common in the sense that they are the common product of the same collective agreement of general application and do not differ according to the particular establishment. ..."

It was decided by the Industrial Tribunal at paragraph 19 of its decision:

"that in making the comparison between the terms and conditions observed at establishment "X" and establishment "Y" in respect of each relevant class, the test is that they should be substantially the same, "differences de minimis" being ignored. This seems to us to accord with May LJ in Leverton as approved by Lord Bridge."

Do the terms and conditions of employment of a particular relevant class whether the applicant's class or the comparator's class at establishment "X" and establishment "Y" differ, subject to de minimis, because the members of that class are employed at their own particular establishment (here "a pit")? One can look at derivation or origin and one can look at the affect of "geography".

If the answer is "no" both in respect of the applicant's class and the comparator's class, then the comparison, like with like, can be made - if not Section 1(6) is not satisfied.

We seek to apply those tests. The problem posed before us in this appeal is countrywide and does not limit itself to two specific pits.

Cleaners and Clerical Workers

It is common ground between the parties for the purposes of this appeal that common terms and conditions of employment are observed between the relevant establishments so far as cleaners are concerned and clerical staff are concerned.

Canteen Workers

The Industrial Tribunal make their findings in paragraphs 5 (xv) and (xvi):

"(xv)In 1976 the Secretary of State for Employment made an Order abolishing the Industrial and Staff Canteens Wages Council. It was necessary, therefore, for the respondent and the NUM to enter into a new agreement. This was reached in May 1977 and it consolidated existing terms and conditions and formally brought within its scope industrial workers employed at other industrial canteens and, the following year, those industrial employees at staff canteens (other than at Hobart House in London and Harrow who were brought into that agreement shortly thereafter). The agreement, which recited "the 1955 agreement", specifically stated that it was "designed to maintain the principles that uniform national arrangements should apply" and that "the wages and conditions were disassociated from agreements related to the coalmining industry".

(xvi)Canteen workers benefit from the mineworkers "incentive bonus" scheme. By central agreement, they are generally entitled to 40% of the incentive bonus earned by underground workers (the same percentage to which surface mineworkers are entitled) but for the same reasons which cause local variations in the amount of incentive bonus paid to an underground worker, the amounts of incentive bonus payable to canteen workers (which is calculated by reference to the sum payable to an underground worker and not, therefore, related to canteen workers' own efforts) also have local variations. Canteen workers have no entitlement to concessionary coal or to any other allowance (other than night work allowance, which is self-explanatory and which is not payable to mineworkers)."

It seems to the industrial members that the entitlement to a bonus is based upon the central agreement and therefore has a common source. Provided that the word "generally" in the above citation refers only to the one agreement, I agree, and would join in finding that the terms and conditions for canteen workers at all relevant establishments were "common". It is a national formula and it was negotiated and agreed at national level.

Mineworkers

Are common terms and conditions of employment observed at each pit? These terms and conditions include the benefits of bonus incentives and concessionary coal - this is common ground. The benefits must be examined on a contractual basis and under the schedule of the "Terms and Conditions for Mineworkers" served pursuant to the provisions of the Employment Protection (Consolidation) Act 1978. The contents are divided into three parts and referred to as follows "Part I - National Agreements; Part II - District Agreements; and Part III - Pit Agreements".

The issue can be simply stated thus -

(i)Is the term and condition of employment relating to concessionary coal the same (subject to de minimis) for a mineworker in each pit or area? Does it emanate from a common collective agreement? Does it result in the same benefit? Is it sufficient to say that it is a national entitlement?

(ii)Is the term and condition of employment relating to bonus incentive the same (subject to de minimis) for a mineworker in each pit or area? Does it emanate from a common collective agreement? Does it result in the same benefit? Is it sufficient to say that it is a national entitlement?

If the answer to either question is "no", then those mineworkers do not work at relevant establishments for the purpose of Section 1(6). One cannot compare like with like.

Concessionary Coal

The Industrial Tribunal made its finding upon this at paragraph 5 (viii) as follows -

"(viii) A further matter which varies at local level is the entitlement to concessionary coal. Prior to 1983 there was no central agreement and the extent of the concession was determined on a Wages District or Area basis and there were local variations.
On 29 November 1983
the respondent entered into an industry-wide concessionary fuel agreement with the NUM. Its provisions were expressed to "supersede all existing arrangements whether arising from divisional or other agreement or custom and practice" and, in practice, it preserved existing variations (which, for example, varied between 10.55 tonnes per year - Leicestershire - and 7.11 tonnes - South Wales). Benefits under the agreement extended to all mineworkers and coke workers but certain categories of worker, including canteen and snack bar personnel, were expressly excluded. (In pre-hearing pleadings Mr Todd had alleged that "many employees of British Coal who were not classified as mineworkers received concessionary coal" yet no evidence in support of that averment was placed before us. We find, therefore, the position to be as we have stated it.)"

We believe the date of this agreement to be the 2nd March 1984.

It is clear that the term or condition relating to concessionary coal derives from a national agreement which covers the whole country and its terms and conditions are generally observed. The terms of this agreement may be relevant for Section 1(3) but it does not, in our judgment, undermine "commonality" for the purposes of Section 1(6). The amount of concessionary coal can be ascertained by reading that national agreement.

Incentive Bonus

On this issue the members of this Tribunal have been unable to agree, I am in the minority.

The Industrial Tribunal made its findings at paragraph 5 (vii) and 20 (i) of the Reasons. "5 (vii)One of the matters which vary at local level (by which we mean at district, area or pit level) is the "incentive bonus". In the mid-1970s there had been negotiations between the respondent and the NUM with a view to the introduction of an incentive element into mineworkers' remuneration. In 1977 a basic industry-wide formula ("the model") was arrived at in the course of negotiation, but in the event it did not become an agreement because it did not receive majority support in two separate ballots of NUM members. Following the failure to obtain an agreement approved by the workforce, the respondent condoned (and the NUM did not obstruct) local incentive bonus agreements. In local arrangements the model could be adopted (and was largely so adopted) but even from the start, the terms of incentive bonus agreements were not identical as between different areas. Evidence before us showed how, after the 1984/1985 national coal industry dispute, there has been a trend for individual pits or groups of pits to vary more widely in settling their local conditions for payment of the incentive bonus.

20(i) Surface Mineworkers

a. They are governed by a nationally negotiated agreement which sets basic and overtime rates of pay, sick pay, holidays and other similar matters. If any additional allowances are in issue to surface (as distinct from underground) workers, these are payable for work in specific conditions and we do not judge them as significant in the context of this case. There is industry-wide entitlement to concessionary fuel and to an incentive bonus, both of which vary in extent as a result of local agreement and negotiation, the former being embodied in a written national agreement (with all its local variations which existed at the commencement of the agreement) and the latter existing, not as a result of written national agreement, because that could not be achieved, but as a result of encouragement by the respondent, condoned by the NUM, to local arrangements. A "model agreement" was publicised by the respondent upon which local negotiations could be based; we accepted that the model agreement was adopted in the majority of areas and districts, but that it was modified (albeit not in any radical way) to suit the needs of some local negotiations. The bonus percentage for this category of worker was and is uniform industry-wide at 40% of the figure received by underground mineworkers, but the formula used for calculation of the 100% figure varied greatly. The part which incentive bonus played in the pay packet of a surface worker is significant, not in our opinion de minimis, although it probably did not exceed 15% of gross weekly earnings.

b. In our view surface mineworkers at different locations in the respondents' employ are in the same employment. They are governed by national terms and conditions, including those for concessionary coal; local variations in the entitlement do not destroy the centralised, industry-wide nature of the entitlement. Further, if incentive bonus can properly be said to be payable under a "term or condition" of employment variations in payment can similarly be seen as a locally varied fulfilment of the same universally accepted central term or condition. If incentive bonus, on the other hand, is not properly classed as a "term or condition" (because of its locally negotiated nature and the lack of formal central direction or agreement in respect of it), then its existence does not affect our conclusion on this issue in any way, since we compare only terms and conditions."

Those findings can be summarised:

(a)Because the Scheme proposed in 1977 was rejected by national ballot, no national agreement was reached.

(b)The terms applicable were therefore negotiated and agreed at local level. Copious evidence of this was before the Industrial Tribunal.

(c)Even where the "model" of 1977 was used as a starting point, local variations were agreed and as the Industrial Tribunal found "evidence before us showed how, after the 1984/85 National Coal Industry dispute, there has been a trend for individual pits or groups of pits to vary more widely in settling their local conditions for payment of the incentive bonus."

(d)That part of the mineworkers' "pay packet" represented by the incentive bonus, was not insignificant. It was not "de minimis".

(e)The amount of incentive bonus varies substantially from locality to locality ie on geographical basis.

I take the view that to express the term as "a national entitlement" - although it derives from a local agreement is far too vague in contractual terms. It may be a recognised factor of pay in the industry but its calculation and amount depends upon local agreements. It is a part of the "pay packet" which is to be ascertained by application and reference to local agreements. It is impossible on this basis to compare like with like.

The industrial members disagree. They express their reasoning thus. Even although "the Terms and Conditions for Mineworkers" served pursuant to the provisions of the 1978 Act is divided into three parts, they are all constituent parts of one agreement. All surface workers have a bonus entitlement. All bonuses - even those covered by a single national agreement - are bound to depend for their detailed calculation upon local variation, which will depend upon such variations as the ability to reach a coal face and the geological conditions. The terms and conditions looked at in the round come under the one umbrella of the national agreement. Bonuses exist within a single factory and can vary considerably. The mere fact that bonuses vary in amount does not indicate that each does not derive from a common formula incorporated in common terms and conditions of employment. Many contracts of employment contain variables but that does not destroy commonality. They would therefore conclude that the mineworkers terms and conditions relating to incentive bonus are common.

It therefore follows that cleaners and canteen workers are in the same employment as clerical staff and mineworkers. The appeal fails on this issue.

S.1(3) - DEFENCE

We turn to the defence raised under Section 1(3). The law on this subsection is in a state of flux and has changed in its approach since the decision of this Industrial Tribunal on 5th December 1990. We also note the comment made by the Industrial Tribunal in paragraph 24 of its decision where they realise that this defence can be raised anew at any substantive hearing unrestricted by any finding of this Tribunal at the present stage. They have only entered upon a consideration of this defence with a degree of reluctance and at the request of the parties. We must remember that at present we are working on the assumption of equal value, but after the experts' report the defence can be raised again upon different evidence.

The most recent case in which this Appeal Tribunal has been asked to consider the wording of Section 1(3) is the The Financial Times Ltd v. Byrn & Others [1992] IRLR 163 (leave to appeal has been refused by the Court of Appeal). It was emphasised that the Equal Pay Act is dealing with discrimination and we held that the burden of proof was upon the Respondent to establish its defence. The forms of sex discrimination which are now recognised have been helpfully analysed by Mr Patrick Elias QC, and accepted by us in, Enderby v. Frenchay Health Authority [1991] ICR 382 at p.397D to 398A.

At paragraph 15 to 19 of the Financial Times case we examined the problems in procedure that could possibly arise as a result of the issues under Section 1(3).

The defence raised by BCC in the present cases can be best understood from part of a Notice of Appearance in the case of Mrs Smith & Others where when referring to the comparison of mine workers and canteen workers they say as follows:-

"(1)The contract of employment of a mine worker is governed by a composite of collective agreements made between the respondents and either the National Union of Mineworkers of the Union of Democratic Mineworkers at national, area and pit level."

(2)Terms negotiated at pit level include:

-most aspects of incentive bonus, which contributes a substantial part of a mine worker's earnings.

-Miscellaneous Agreements as to Working Hours and Practices:

(3)Terms negotiated at area level include some aspects of:

-incentive bonus

-allowances for working in wet conditions

-allowances for working at height

(4)Canteen Workers' Terms likewise derived from Various Collective Agreements at different Levels; and in particular Incentive Bonus negotiated at Pit Level contributes a substantial proportion of their Earnings."

Likewise in connection with cleaners and clerical workers the defence is that the difference in pay is due to collective agreements entered into without any reference to sex.

Thus the issues for this Industrial Tribunal were:-

1.In each case was the difference in pay or other relevant term of each contract of employment genuinely due to a material factor and what was that factor?

2.Was that factor discriminatory - "tainted with sex"?

3.If so, in what way?

4.If it was directly discriminatory then the respondents would have failed to prove its defence.

5.If it was indirectly discriminatory then the approach indicated by Section 1(1)(b) of the Sex Discrimination Act 1975 should be adopted - a pool may have to be identified and justification established in the sense indicated in Hampson and Enderby. It is at this last stage that justification becomes relevant.

The Industrial Tribunal did not approach the issues in this way and it may be that by the time a Section 1(3) defence is finally raised at a substantive hearing, the law may be further clarified. The Tribunal expressed itself thus -

"Thus, in these cases, we must decide:-

(i)what was or were the reason(s) for the admitted differences in benefits received by the applicants and their comparators?

(ii)how does the respondent seek to justify those differences: and

(iii)is their justification one which satisfies objective criteria and is not one which occurs because of a difference of sex between applicant and comparator."

This approach does not follow the present law as we understand it, and we are unanimous in taking the view that it must follow - and without criticism - that the decision is flawed.

We therefore find ourselves in the position envisaged by the learned Master of the Rolls in Dobie v. Burns International Security [1984] ICR 812 where at p.818F he says -

"Once you detect that there has been a misdirection, and particularly that there has been expressed misdirection of law, the next question to be asked is not whether the conclusion of the Tribunal is plainly wrong, but whether it is plainly and unarguably right notwithstanding that misdirection. It is only if it is plainly and unarguably right notwithstanding the misdirection that the decision can stand. If the conclusion was wrong or might have been wrong, then it is for an appellate tribunal to remit the case to the only tribunal which is charged with making findings of fact."

The question for us is whether, in the present decision, there are sufficient findings of fact which, applied to the law as stated by us above, can satisfy us that the conclusion reached by the Industrial Tribunal was plainly and unarguably right.

In respect of cleaners and clerical workers, the Tribunal make clear findings in paragraphs 5(xviii), (xix), (xx), (xxi) concerning the basis upon which their remuneration is negotiated and there is no indication in those findings that there is any ground for alleging that they were tainted by sex. The basis of those negotiations was unrelated to mine workers whether surface workers or those working below ground.

Likewise, when examining the comparison of cleaners with mine workers it seems to us that there are insufficient findings of fact from which the identification of discrimination and the consideration of discrimination can be discerned.

The history concerning canteen workers is more complicated. The findings of fact are set out in paragraphs 5(xi) to (xv) of the decision.

"(xi)So far we have dealt with the position of mineworkers. We now turn to the position of other workers. The 1948 Ancillary Workers' Agreement, concluded between the respondent and the NUM, provided for specified groups to be conditioned either to agreements of a specified industry or [provided for their treatment in another way. Coke by-product workers and briquetting workers then employed on colliery premises and governed by coal mining wages agreements were to be dealt with by a dedicated scheme (former) and by a yet to be negotiated scheme (latter). `Other categories', generally described as `ancillary workers' and which, by schedule attached, included chauffeurs, gardeners, telephone operators and lorry men (all `if not employed on or about the colliery premises') were expressly to be dealt with by reference to outside conditions appropriate to their industry or, if no such conditions could be found, by separately negotiated conditions to be concluded `without relating them to the coalmining industry'. We heard evidence, which we accepted, to the effect that the workers affected by the then disociation of ancillary workers from the coalmining industry agreements were predominantly men.

(xii)In this case we are concerned primarily with three categories of worker, which were at some time or other dealt with in separate agreements and not in the same way as mineworkers. The first of these categories is canteen workers.

(xiii)`Originally canteens were run by the Miners' Welfare Commission. They were thus not in the respondent's employ when the 1948 agreement was concluded; they are not therefore mentioned therein. However, under the Miners' Welfare Act 1952, it was decreed that all canteen staff would be transferred into the respondent's employment. By agreement dated 30 April 1955, again concluded between the respondent and the NUM, the rates of pay of colliery canteen workers (and snack bar attendants, with whom we deal in the next sub-paragraph) were set, with provision for future increases by negotiation. The rates provided for different levels of pay for male and female workers performing the same function. It was further expressly provided in the agreement that their terms and conditions other than pay should henceforth be regulated by the `Wages Regulations (Industrial and Staff Canteens Undertakings) Wages Order 1952' and it was specific provision in the agreement that it was `designed to dissociate the wages and conditions of service of male and female employees from agreements relating to the coalmining industry'.

(xiv)We heard evidence, and we accepted it, that the workers affected by the 1955 agreement were predominantly female. It should, however, be recorded that included in this agreement were snack bar attendants; they were, because of the location of snack bars in or near pithead baths, exclusively male yet their inclusion, while noteworthy, does not disturb our ffinding that the workers affected by the 1955 agreement - as a class - were predominantly female. The terms of the 1955 agreement were also applied to canteen workers at other industrial canteens, e.g. cokeovens and workshops, but they did not apply to those at staff canteens (i.e. located at offices). The difference in rates for male and female canteen workers disappeared with effect from June 1975, when common rates were established.

(xv)In 1976 the Secretary of State for Employment made an Order abolishing the Industrial and Staff Canteens Wages Council. It was necessary, therefore, for the respondent and the NUM to enter a new agreement. This was reached in May 1977 and it consolidated existing terms and conditions and formally brought within its scope industrial workers employed at other industrial canteens and, the following year, those industrial employees at staff canteens (other than at Hobart House in London and Harrow who were brought into that agreement shortly thereafter). The agreement, which recited `the 1955 agreement', specifically stated that it was `designed to maintain the principles that uniform national arrangements should apply' and that `the wages and conditions were disassociated from agreements related to the coalmining industry'."

When considering the comparison between canteen worker and clerical worker the Tribunal said this at paragraph 29B:

"(a)They were paid differently because they were part of separate pay structures as a result of different negotiations with different unions. There was no evidence before us of the actual pay differences.

(b)The evidence put before us by the respondent explained, by reference to the existence of the separate structures, why the pay difference exists. That same evidence, however, did not prove to the required standard the presence of a justification for the existence of those separate pay structures sufficient to displace the inference of discrimination which appeared to us to arise in these cases, as it had in the cases of the canteen workers in comparison with the surface mineworkers; the respondent has therefore failed to establish a genuine material factor defence to the claims of canteen workers for equal pay with clerical workers. Their claims must therefore be referred to an independent expert for evaluation."

The reasoning there, in our judgment, does not satisfy the issues which are raised above. The question is whether the system for the negotiation of canteen workers, when compared with that of clerical workers, indicated any discrimination? Despite what is said in those paragraphs we can find no findings of fact which tend to that view.

The real problem arises when one takes the comparison between canteen workers and mine workers. It is submitted that a direct discrimination finding can be found in paragraph 29A(d) where the Tribunal say:-

"It seems to us as likely that the difference was due to an ingrained approach, based upon sex, which meant that women, whatever they did, would not be classed or categorised as surface mineworkers. It may well be that that approach has been condoned - even encouraged - by the NUM in the past, but it does not now prevent these applicants from taking appropriate complaint under the equal value legislation.

The submission on indirect discrimination is that the women are prevented from receiving coal or the concessionary bonus because they cannot get close enough to the coal face and it is because they are not mine workers that that condition is discriminatory. Whilst it is not dealt with in precisely that way it seems to the industrial members possible to read into the decision that that was a condition with which women could not comply and therefore they were at a disadvantage and that the BCC had failed to justify that condition.

That is their view.

I find myself in greater difficulty in understanding the decision as it stands. And I would prefer to return this issue to be re-heard, alternatively, that this issue should be raised and dealt with only if we are wrong on our decision under Section 1(6). My problem arises from the express findings in paragraphs 29A(i)(a)(b)(c) and (d) which recite the history of the negotiating structure concerning canteen workers and find expressly that at each stage there was no sexually discriminatory reason for the separation of the pay structures. Those structures were referred to as the "disassociation" of ancillary workers, who included canteen workers and others of whom a substantial number were male, from the mine workers. The last material date was in 1976/77 and this is referred to in (d) as follows:

"With the abolition of the Wages Council in 1976 a new agreement was reached with regard to canteen workers, expressly continuing the dissociation of their terms and conditions from those of mineworkers. Other groups were still dealt with under outside Wages Councils or separate agreements: there was no sexually discriminatory reason for the treatment of the canteen workers in 1976/77."

In the light of these findings of fact it seems to me that there is no discriminatory factor, no tainting of sex in the negotiating machinery relevant to the canteen workers which requires any explanation or justification. It is right that those findings seem to be in conflict with some later findings but it may be that those occur because of the difference of approach on the law taken by the Industrial Tribunal. I could not agree that upon the different approach in law, the decision of this Industrial Tribunal was without further investigation plainly and unarguably correct.

It follows, therefore, that on the facts as found by the Industrial Tribunal and applying the law as we now understand it to be, we decide that there was no evidence of discrimination in the negotiating structure when comparing cleaners with clerical workers or mineworkers and canteen workers with clerical workers, but by a majority, that the Section 1(3) defence fails on the basis of indirect discrimination only, when the comparison is of canteen workers with mine workers.

It follows that the S.1(3) appeal fails on that one issue only.

We would be grateful if the form of Order could be agreed by counsel. Leave to appeal.