United Kingdom Employment Appeal Tribunal

BAILII case number: [1993] UKEAT 501_92_2101

Appeal No. EAT/501/92

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 18 to 21 January 1993

Judgement delivered 17 March 1993

Before

THE HONOURABLE MR JUSTICE WOOD MC (PRESIDENT)

MR T S BATHO

MR D O GLADWIN CBE JP

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NORTH YORKSHIRE COUNTY COUNCIL          APPELLANTS

MRS D RATCLIFFE, MRS M COLLINSON and MRS C CROSBY          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants Mr D Pannick QC

Instructed by -

M H Lightfoot LLB

Solicitor

North Yorkshire County

Council

County Secretary's Dept

County Hall

Northallerton

North Yorkshire DL7 8AD

For the Respondents Mr A Lester QC,

Mr A Bradley (of Counsel)

and Ms D Rose (of Counsel)

Instructed by -

Messrs Brian Thompson &

Partners

Solicitors

17 Wellington Street

Leeds LS1 4DL


 


MR JUSTICE WOOD (PRESIDENT): This is a test case. All the Applicants are women: all the comparators are men. It is essential to emphasise from the start that insofar as discrimination is relevant to any of the issues, that allegation is of direct - not indirect - discrimination.

North Yorkshire County Council (the County Council) appeal against the findings of an Industrial Tribunal sitting at Leeds over four days in May 1992 under the Chairmanship of Mr P A Morris, which decided in favour of the Applicants as follows:

"1. It is the unanimous decision of the industrial tribunal that the applicants are in the same employment as the male comparators.

2. It is the majority decision of the tribunal that the respondents have failed to prove that the variations between the applicants contracts of employment and the male comparators as to rate of pay, holiday pay and sickness pay are due to a material factor which is not the difference of sex.

3. It is the unanimous decision of the tribunal that the applicants are employed on work rated as equivalent to that of the male comparators.

4. The applicants succeed in their claim and are entitled to have their contracts of employment modified so as to be equivalent to the male comparators in respect of rates of pay, holiday pay and sickness pay and for those terms to be backdated to 28 August 1991."

These findings cover three distinct issues arising:-

(a) under S.1(6) of the Equal Pay Act 1970;

(b) under S.1(2)(b) and S.1(5) of the same Act; and

(c) under S.1(3).

Although not dealt with in this sequence by the Industrial Tribunal, it seems to us that the above is the logical approach. As this is a test case in which Local Authorities and Trade Unions are seeking guidance, and which will almost certainly progress to Higher Courts, we have been urged to deal with each of these issues, although in certain circumstances this might not be strictly necessary. We have consented.

The area controlled by the County Council is large and mainly rural. This case concerns the three Applicants who were employed as catering staff in the supply of school and other meals, but mainly school meals. The catering staff numbered some 1,300 and were situated at 39 different sites or establishments. It is apparent from a long report from Messrs Cooper and Lybrand that the arrangements were complicated in that in some schools the kitchens were at the school, while at other situations there was a central kitchen supplying several schools. The numbers of meals clearly varied from site to site.

Mrs Ratcliffe and Mrs Collinson are and were employed as catering assistants - grade 1 - the former at Malton Secondary School and the latter at Thirsk County Primary School. Mrs Crosby is employed at Archbishop Holgate Senior School in York as a catering assistant/cashier - grade 2 (Higher Grade). They compare themselves, as to those at grade 1, first with Mr Helliwell, who is a "gully emptier attendant" based at Snaygill Depot, and secondly, with Mr Myers a roadman at the Malton Depot. The grade 2 comparators are Mr Meek, a school crossing patrolman in York, and Mr Austwick, a weighbridge attendant at the Seamer Carr Waste Disposal site. He lives in Scarborough.

The Applicants each complain that they received lower hourly pay, holiday pay and sick pay than their comparators and claim equal pay under the 1970 Act.

Prior to August 1991 (in fact to the end of the summer term 1991) the Applicants received the same basic rates of pay as their comparators. Their jobs had been rated as equivalent under a job evaluation scheme. The rates were agreed by the National Joint Council (NJC) for Local Authorities Services (Manual Workers) and are referred to as the NJC Rates, Terms and Conditions.

That employment of the Applicants came to an end on redundancy and they were re-employed the next school term on different terms and conditions. It is this which gives rise to the present dispute.

This situation arises out of the provisions of the Local Government Act 1988.

In broad terms, Local Authorities were required in some defined activities (including catering, but excluding school crossing controls) to put out the work for competitive tendering, known as compulsory competitive tendering (CCT). The Local Authority was itself permitted to tender and for this purpose was allowed to form a Direct Service Organisation (DSO). This was part of the local authority - not a separate legal entity - so that in the event of tendering successfully, the local authority would still be the employer.

The long title to the Act reads in its first sentence as follows, "An Act to secure that local and other public bodies undertake certain activities only if they can do so competitively; ..". Sections 1, 2 and 3 contain definitions of "Defined Authorities", "Defined Activities" and "Functional Work" (including the present activity). Section 6 prohibits the carrying out of Functional Work unless each of six conditions is satisfied. Those conditions are set out in Section 7 and need to be read, but for the present purposes we need only refer to subsections (6),(7), and (8):

"(6) The fourth condition is that before carrying out the work the authority, through their direct labour organisation or a similar organisation, prepared a written bid indicating their wish to carry out the work.

(7) The fifth condition is that the authority, in reaching the decision that they should carry out the work and in doing anything else (whether or not required by this Part) in connection with the work before reaching the decision, did not act in a manner having the effect or intended or likely to have the effect of restricting, distorting or preventing competition.

(8) The sixth condition is that in carrying out the work the authority comply with the detailed specification of it mentioned in subsections (2) and (3) above."

Section 8(3) contains further detailed requirements and in particular that the DSO must debit and credit items virtually as an independent contractor ("assuming it were an independent contractor").

Section 9 provides stringent requirements on accounting and forbids the local authority to "top up" the DSO operation. The operation must stand or fall solely on the efforts and commercial abilities of the DSO. Section 10 requires a return on capital as the Secretary of State may specify. It is at present 5%.

The facts are not seriously in dispute between the parties, nor indeed did the members of the Industrial Tribunal disagree to any material extent as is indicated by the majority in paragraph 2 at page 7 of the Decision:

"We have read the minority judgment of Mr R Grant and accept his account of the facts, where it gives more detail to the broad approach adopted in the preceding account of the facts, apart from Paragraph 16 of the minority judgment where accepting what is said we would add that discarding NJC terms was not necessarily the only way to defeat competition."

The allocation of contracts for school catering proceeded by reference to six geographical areas.

Contract Area 1:Craven and Harrogate

Contract Area 2:Scarborough and Ryedale

Contract Area 3:Richmond and Hambleton

Contract Area 4:Harrogate and Hambleton

Contract Area 5:York and Selby

Contract Area 6:York and Ryedale.

In the Spring of 1990 tenders were invited for the provision of a school meals service for Area 1. The catering DSO submitted its tender on 4th May and was awarded the contract for a period of four years starting on 1st August 1990. The tender was based on staff being paid approximately 8% less than NJC terms and conditions previously in force. It is important to note however that there was no other tender and therefore no competition. The unit price for a primary meal was £1.17.

Towards the end of 1990 tenders were invited for Area 2 and a competitive tender was received from a private company, Contract Catering Group Ltd (CCG). This tender was lower than that submitted by DSO by 9p per primary meal. The CCG tender represented a saving of "£270,000 a year" over the DSO tendered price of £1.15 per meal.

The loss of this contract was a serious blow to the DSO. It was obvious that if it were to have any chance of success in future tendering for the remaining areas the price for the primary meal would have to be significantly reduced. The breakdown of the expenditure of the DSO was as follows:-

Kitchen labour 51%

Food37%

Cost of production 4%

Administrative salaries 3%

Other administrative overheads 5%.

Savings had already been made on purchase of food by the use of frozen food and cheese, although provision contracts were still being examined, and it became clear that the essential reduction would have to be in labour costs. It was also important for the DSO to win the remaining contracts in the Areas 3-6 because that would enable it to spread the administrative costs more thinly and thus to lessen the cost of those services in each contract.

The DSO believed that in order to win the contracts for Areas 3-6 it would have to quote a unit price for primary meals of less than £1. Unless it did so it would not be able to compete with CCG in Areas 3-6 and certainly not on the NJC rates of pay or indeed those paid to 15 staff in Area 1, which were only slightly lower than the NJC rates.

The DSO approached the problem by submitting two tender prices. First, there was one price for each area separately and secondly, there was a lower price (the alternative) if it was successful in all four areas. In order to achieve this pricing it was forced to reduce the labour cost by about 25% and this was done by a combination of reducing the rate per hour, sick pay, holiday pay, abolishing retainers and reduction in hours. These changes would bring its pricing more in line with the competitors and particularly with CCG.

In the event DSO succeeded and submitted the lowest tender. It was awarded the contract for four years from 22nd July 1991 in respect of all four areas. The alternative price for a primary standard meal of 98p compared with the CCG quote of between £1.06 and £1.11.

Mr Tillbrook was the DSO catering manager and it is apparent from a number of his reports presented to the relevant committees and also from the report of Messrs Cooper and Lybrand, that the greatest care and most anxious consideration was given to the problem of competitive tendering. For instance, one result of the successful tendering by DSO was that the staff would remain members of the County Council's Pension Scheme.

In those other DSOs (other activities) which dealt with the comparators, the terms of the successful tenders showed that terms and conditions similar to the NJC rates were obtained, but it is right to point out that the financial reward was in some cases reduced as bonuses were not paid.

In all DSOs the disciplinary and grievance procedures changed, in that the channels were no longer through the provincial joint council and the NJC, but to the General Manager and thereafter to the DSO sub-committee of the County Council.

Having been successful in its tender for Areas 3 - 6, the County Council then wrote to each of the relevant employees in the catering services offering them various alternatives. The present Applicants chose to take redundancy, they were paid their redundancy money and they entered into fresh contracts of employment.

The first issue arises upon the wording of S.1(6) of the 1970 Act. Only part of the section need be cited:-

"S.1(6) ... and men shall be treated as in the same employment with a women 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 relevant wording for the present case is that which is underlined)

The Industrial Tribunal dealt with it as follows:-

"CONCLUSIONS AS TO "SAME EMPLOYMENT"

1. It is clear that before the change the applicants were employees of the County Council, all be it at different establishments, and their male comparators were likewise employees of the County Council. The inter-positioning of the DSOs has not changed that position. Whatever the independence that the Local Government Act 1988 tries to achieve or enforce the real control of the DSOs and the employees resides in the County Council through the DSO sub-committee of the County Council. Common terms and conditions of employment are generally observed and certainly for the relevant classes of employees. In particular, in the broad employment of those manual workers in education, one could not say they were not in the same employment, namely the employment of the County Council education sector."

The leading case on the construction of S.1(6) is Leverton v. Clwyd CC [1989] ICR 22. In that case the applicant, a nursery nurse, compared herself with male comparators but all of them were the subject of the terms and conditions of service contained in what was known as "The Purple Book". It is not difficult therefore to see that in that case the applicant and her comparators were all governed by the same collective agreement and "generally", by those same terms and conditions of employment. That case does not solve the problem of the phrase "for employees of the relevant classes". It is Mr Pannick's submission that the applicant and her comparators must each of them be governed by common terms and conditions. It seems to us, and we agree with Mr Lester on this, that the test for S.1(6) is whether the Applicant and those of her class are on common terms and conditions, and whether a comparator and those of his class are on common terms and conditions of employment. Looking to the examples given by Lord Bridge in Leverton it seems to us that if the terms and conditions of employment and the resulting calculation of pay or bonuses depends upon a geographical situation, or if those terms and conditions and those calculations are from a different contractual source or for a reason which does depend upon history or geography, then the comparison between the applicant and her comparator is not a comparison of like with like.

Mr Pannick's submission would mean that the comparison being made between the Applicant and her comparators was made prior to that being carried out under S.1(2)(c). It is to be remembered that it is not only the terms of pay which are to be the subject of an equality clause.

We have considered this matter at somewhat greater length in a recent case of British Coal Corporation v. Mrs Smith & Ors (which is not as yet reported).

Mr Pannick then turns to the decision set out above and makes the following criticisms:-

1. That the Tribunal has not clearly directed itself properly on the law.
2. That the decision contains no analysis of the differences between the terms and conditions of employment of the different classes of employees at the different establishments.
3. That the Tribunal seems to have concentrated on whether the parties were in the same employment in the sense that they were all employed by the County Council. This is not the test. "Real control" is not the test.
4. In referring to the manual workers in education it is not clear to whom the Tribunal was referring and what was the relevance.

Mr Lester, very fairly, found it difficult to argue against those criticisms and we for our part accept them.

The position for us therefore is that we must apply the principles in Dobie v. Burns International Securities Services UK Ltd [1984] ICR 812, 818G - H per Sir John Donaldson MR -

"Once you detect there has been a misdirection, and particularly that there has been an express 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 to the only tribunal which is charged with making findings of fact."

Thus if upon a proper direction of law we were satisfied that the decision of this Tribunal on the facts found is plainly and unarguably correct then we would give effect to such a view. Having read the documentation and read the decision and listened to submissions we find ourselves quite unable to say that this case should not be remitted so that the relevant findings of fact should be made upon the correct direction in law.

It would follow therefore that on this ground alone this matter should be remitted for a rehearing before a different Tribunal.

The second issue arises under S.1(2)(b) and S.1(5) of the Act. It is not to be forgotten that the Applicants also claim under S.1(2)(c) (equal value), but they allege in the first place that they are employed on "work rated as equivalent with that of a man". One needs then to turn to S.1(5) which reads:

"(5) A woman is to be regarded as employed on work rates as equivalent with that of any men if, but only if, her job and their job have been given an equal value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value but for the evaluation being made on a system setting different values for men and women on the same demand under any heading."

It is common ground that before August 1991 the Applicants were employed on work which had been evaluated under a job evaluation scheme as equal to that of their male comparators. This job evaluation scheme had been accepted by the County Council. It is fair to say that this point is taken by Mr Pannick very much as the most minor argument in his case, but he submits that there is no job evaluation exercise which has been carried out since the start of the Applicants' new employment on 28th August 1991 and that the work done since the re-employment is under a new contract of employment and with a different specification. The work is in fact not different in any material respect to that previously done by the Respondents, indeed Mr Pannick concedes that the Applicants are doing the same work, but he does not concede that it was of equal value and he does not concede that it was of equal value under the existence of a relevant job evaluation scheme because of the change in the contractual relationships. He submits that the present job, namely "her job" under S.1(5) has not been re-evaluated or indeed valuated under a job evaluation scheme which has been accepted by the County Council.

In support of his submissions he relies upon Arnold v. Beecham Group [1982] ICR 744, 750H - 752E, per Browne-Wilkinson J. at the EAT. It is clear from that case that an evaluation study does not exist for the purposes of S.1(5) unless and until employers have accepted or adopted it and it is in force. On the facts of that case this Appeal Tribunal concluded that it had been accepted. The submission for the County Council is that the present job evaluation scheme has not been accepted so far as it is relevant to the present work of the Applicants.

It seems to us on the facts that in making the concession which Mr Pannick has made, the County Council has in fact accepted that the present work is of equal value to that which was being carried out by the Applicants prior to August 1991. There is no suggestion that there is any relevant change in the present job from the past job nor any changes in the comparators job. It seems to us therefore that so far as these three Applicants' cases are concerned, the County Council has accepted the effectiveness and application of the job evaluation scheme carried out before 1991. There are many ways in which changes could have been made, but they were not.

The Industrial Tribunal dealt with this issue as follows:

"SUMMARY OF CONCLUSIONS

...

3. The Tribunal are unanimous in finding that the job evaluation applied before the dismissal and re-employment of the applicants, once it has been accepted, which it was in 1988, and the employees continue to work for the same employer, it cannot be said it no longer applies, at least until it is replaced by another and perhaps more up to date job evaluation, which is accepted, to replace it."

We approach this issue slightly differently from the Industrial Tribunal but we are satisfied that their conclusion was correct and disclosed no error of law.

The third main issue and the one which causes the widest interest is the application of S.1(3) of the 1970 Act. By that sub-section it is open to an employer to defend a claim under S.1(2) by showing that the variation in the contractual terms

"... 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)... (b) above, must be a material difference between the woman's case and the man's ..."

The Tribunal deal with this at page 6 of the Reasons as follows:

"CONCLUSION OF MAJORITY AS TO "MATERIAL FACTOR"

1. The reason that the applicants and other 'school dinner ladies' are on less favourable terms and conditions is because Mr Tillbrook chose to reduce those terms from the NJC terms and conditions for manual workers because he perceived that it was necessary to do so in order to be able to compete in the open market, that is to say due to his perception of market forces in a market which is virtually exclusively female doing work which is convenient to that female workforce and which, but for the particular hours and times of work, that workforce would not be able to do. Indeed that workforce would not be able, because of family commitments, to easily take on any other paid employment, particularly in the large rural areas that dominate North Yorkshire. It was clear to Mr Tillbrook that it was a workforce that would, by and large, continue to do the work, even at a reduced rate of pay, when the alternative was no work or ceasing to have the advantages of remaining a County Council employee and becoming an employee of a commercial catering organisation doing the same work for less favourable terms in any event.

2. It is clear that both the DSO and the employees were over the proverbial "barrel" due to the fact that competitors only employed women and, because of that, employed them on less favourable terms than the Council did previously under the NJC agreement. That may well have been a material factor but it was certainly a material factor due to the difference of sex arising out of the general perception in the United Kingdom, and certainly in North Yorkshire, that a woman should stay at home to look after the children and if she wants to work it must fit in with that domestic duty and a lack of facilities to enable her, easily, to do otherwise.

SUMMARY OF CONCLUSIONS

1. ...

2. The tribunal, by a majority, is satisfied that the respondent has failed to show that the variation between the applicants contracts and those of their male comparators is due to a material factor which is not the difference of sex. ..."

It is also right to include "Concluding comments of Majority" as follows -

"1. It may seem unfortunate that one employer, who has employed and does employ men and women, has had their job evaluated and pays them equal pay, cannot compete in a market where other employers have an entirely female workforce and, accordingly, can get away with paying less because there are no comparators in the same employment but that is the result of an imperfect, unfinished law that does not make across employer comparisons or, perhaps, even set a standard minimum wage as a baseline. It is not without note that the equal pay legislation arises out of European obligations which envisage a much broader socio-economic perspective than is available, or likely to be available, under domestic United Kingdom law."

UNITED KINGDOM LAW

The following propositions are at present established:-

1.The Equal Pay Act of 1970 is to be read as one with the Sex Discrimination Act 1975 - Shields v. E Coomes (Holdings) [1978] ICR 1159, 1174 per Orr LJ.

2.The purpose of the 1970 Act is not to fix wages nor to equate the wages of men and women, it is to remedy that difference in circumstances set out in S.1(2) where there is discrimination "on the ground of sex". Enderby v. Frenchay Health Authority [1991] ICR 382, 403G - 405F.

3.The burden of proof is upon the respondent to show that the variation in pay was due to a material difference, and a genuine material difference, not based on sex. This is the material "factor". It is a factor which differentiates between employees on some basis other than sex. National Vulcan Engineering Insurance Group Ltd v. Wade [1978] ICR 800. See also Macgregor v. GMBATU [1987] ICR 505, 514D-G.

4.The "difference of sex" is determined by an analysis of whether there has been direct or indirect discrimination. Rainey v. Greater Glasgow Health Board [1987] ICR 129 H.L.

5.The result of any material factor is of course the variation in pay, therefore one looks to the "cause" for the differentiation or variation. Indeed the wording of the subsection so indicates.

6.This being a case where direct discrimination in the material factor is alleged, to constitute direct discrimination (the County Council being under the duty to establish the negative) the test to be applied - this is common ground - is whether the treatment (the material factor causing the variation) was "because of her sex".

R v. Birmingham City Council, Ex Parte EOC (1) [1989] 1 AC 1155 per Lord Goff at p.1194., James v. Eastleigh Borough Council [1990] 2 AC 751, per Lord Bridge at p.764D; per Lord Goff at p.770C onwards and per Lord Ackner at p.769B.

The Industrial Tribunal must ask whether, but for sex, the Applicant would have been treated as favourably as a comparable man, or whether the comparable man would have been treated more favourably in like circumstances.

7.The definition of direct discrimination is contained in S.1(1)(a) of the Sex Discrimination Act 1975, which reads -

1. Sex Discrimination against women

(1) A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if -

(a) on the ground of her sex he treats her less favourably than he treats or would treat a man, ..."

This wording clearly contrasts with that contained in S.1(1)(b) which deals with groups or pools, and indicates that where direct discrimination is relevant, it is the applicant, "her", with whom the comparison must be made.

8.Factors which can form the basis for a genuine material factor are "economic or other reasons" per Browne-Wilkinson J. in Jenkins (supra). This judgment was approved by Lord Keith of Kinkel in Rainey (supra) at p.138H-140F in a passage where Mr Justice Browne-Wilkinson said "If the Industrial Tribunal finds that the employer intended to discriminate against women by paying part-time workers, the employer cannot succeed under S.1(3). Even if the employer had no such intention, for S.1(3) to apply the employer must show that the difference in pay between full time and part-time workers is reasonably necessary in order to obtain some result (other than cheap female labour) which the employer desires for economic or other reasons." In terminating his comments on that judgment Lord Keith ends with the following words, "In particular, where there is no question of intentional sex discrimination whether direct or indirect" [and there is none here, our comment] "a difference which is connected with economic factors affecting the efficient carrying on of the employer's business or other activity may well be relevant".

EUROPEAN LAW

1.The differences in pay prohibited in Article 119 of the Treaty of Rome are exclusively those based on the difference of the sex of the workers. Jenkins v. Kingsgate (Clothing Productions) Ltd [1981] ICR 592, 613 (paras 10 and 13) European Court of Justice (ECJ).

2.The principles of European Law were considered carefully by the House of Lords in Rainey before giving its reasons and nothing in Rainey should therefore be considered in conflict with European Law.

3.There seem to have been few cases at the ECJ which deal with direct discrimination. One such was Macarthys Ltd v. Smith [1980] ICR 672 where the test "but for being a woman" was applied.

4.The S.1(3) defence was expressly recognised in Jenkins (supra). It is part of and not contrary to European Law, because by proving it the respondent shows that the variation in pay was not "on the grounds of sex" - a necessary element to establish a breach of Article 119.

THE CASES

We take the opposing cases from the skeleton arguments before us.

The Appellants submit that the Industrial Tribunal erred in law

(a) by its inadequate definition of the material factor;

(b) by its failure to analyse and apply the legal concept of direct discrimination;

(c) by its failure to appreciate that there was no direct sex discrimination by the DSO on its own findings of fact.

Whatever criticisms may or may not be made of CCG, the DSO and the Council were not guilty of any direct sex discrimination against their employees since men and women received the same rates of pay for each job and the object and purpose of the DSO was only to win the contract. The difference between the rates of pay of the Applicants and their male comparables was due to the material factor of compulsory competitive tendering, and the reasonable need to win the contracts for Areas 3 - 6, which is not the difference of sex. There was no factual finding that if a man had applied for a job with the DSO in Catering Areas 3 - 6, his terms and conditions would have differed from those offered to the three Applicants and no such suggestion was made to the Industrial Tribunal. Mr Lester had conceded this.

The Respondent applicants submit that the Industrial Tribunal must be presumed to have known the legal principles involved and to have applied them correctly, especially with the help of such experienced counsel before them, and further that the material factor relied upon by the Council as leading to the Applicants' lower rate of pay was the competitive tendering exercise and the Council's assessment of what rates of pay needed to provide in order to finance a bid in contract Areas 3 - 6 which would defeat a rival bid for the school catering contract. The Tribunal found that this factor was tainted by direct sex discrimination. In other words the Tribunal found itself able in the light of evidence to conclude not only that the Council had failed to discharge the burden of proving that the pay inequality had not been caused by direct discrimination, but also that the pay inequality was in fact caused by direct discrimination in the determination of the Applicants' rates of pay.

The first question for us therefore on this particular aspect of the case is whether the Industrial Tribunal gave itself a sufficient direction in law for us to be able to understand the basis upon which they were so directing themselves and applying the facts. We remind ourselves of the words of Bingham LJ in Meek v. City of Birmingham District Council [1987] IRLR 250 where he indicated that when formulating their reasons Tribunals were not required to create an elaborate formulistic product of refined legal draftsmanship but instead that the reason should "... contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this Court to see whether any question of law arises: and it is highly desirable that the decision of an industrial tribunal should give guidance both to employers and trade unions as to practices which should or should not be adopted."

Although reference is made to S.1 of the Equal Pay Act 1970, the wording of the various subsections is nowhere set out in the Reasons. Although this is not a point to which we attach great importance, nevertheless it is, perhaps, by reference to the actual wording of S.1(6) and to the issue of causation in S.1(3) that the minds of the Industrial Tribunal would have been concentrated on the specific issues. However, nowhere does the Industrial Tribunal refer to the provisions of S.1 of the Sex Discrimination Act and the application of direct discrimination. Nor does it refer to James (supra) nor bear in mind the basic requirements of Meek. Nowhere does it pose for itself the test to be applied and give itself a direction in law.

We are unanimous in accepting Mr Pannick's first criticism based upon Meek. We are unable sufficiently or accurately to follow the direction in law which the Industrial Tribunal gave itself nor the development of its reasoning.

In these circumstances we must turn once more to the case of Dobie (supra) to see if a correct direction in law had been given, the decision was inevitably and unarguably right.

If it might have been different then the matter must be remitted unless we are satisfied that the facts must lead to a wholly contrary result.

It is in the application of the facts of this case to the law that we find ourselves divided. In view of this it seems to us that the only proper course, in the light of the spirit of the guidance in Dobie is also to remit this issue to an Industrial Tribunal for rehearing.

For the reasons which we have given therefore this appeal must be allowed and this case must be remitted to a fresh Tribunal to be reconsidered.

Leave to appeal.