United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR HODGKINS (of Counsel) Under ELAAS on behalf of the Appellant


 


THE HONOURABLE MR JUSTICE LINDSAY (PRESIDENT): We have before us by way of Preliminary Hearing the Appeal of Mrs N Carter in the matter Carter v Maghull & District Conservative Club. The decision of the Tribunal at Liverpool under the chairmanship of Mr D Reed after a hearing on 28^th April 1999 was unanimous and was that

"(1) pursuant to the equality clause within the Applicant's contract, the Applicant is entitled to payment at a rate of £5.23 per hour (2) upon the application of the Applicant this matter will be relisted for the further determination of remedy".

1. The position is this; Mrs Carter, by her IT1 of the 14^th January 1999, brought an equal pay Act claim. It was heard, as we have mentioned, on 28^th April at Liverpool. Mrs Carter was represented by her husband and the Club by its secretary, Mr Moy. Thus, in this difficult area of the law, the Tribunal had, as it would seem, no professional or qualified assistance. The case is made more difficult than many when one reflects that in this case Mrs Carter is employed along with her husband. They are paid one sum for the services of both of them; they divide the sum between them as they please. The Tribunal was taken to the leading case Hayward v Cammell Laird Shipbuilders (1988) IRLR 257.
2. A significant feature of that case was that the employer had failed to plead that there was a genuine material factor which justified the difference in pay between the woman in that case and the comparator that she had chosen in that case. But Hayward does show that for the purposes of determining whether a woman who is on like work with a man has a term of contract less favourable than the term of the similar kind for the man, then (if the term which is alleged to be less favourable is pay) one does not necessarily look at the totality of the value of all benefits and remuneration, but rather that it is right to look, term by term, to the 2 contracts that are being compared. It is not an easy exercise. Thus, to take an example, if a man is contracted to be paid one and a half times the basic hourly rate because he works extremely unsociable hours and is thus paid £30 per hour, that (therefore representing a basic hourly rate of £20 an hour) then, if a woman is on like work, but for ordinary hours and is paid for those ordinary hours a basic hourly rate of £20, she has no claim within the Act, even though, overall, she is receiving less pay. In such a case, comparing like with like, the term of her contract as to the basic hourly rate would be equal to the man's because, adjusted for his unsociable hours, the man's basic rate, would also be £20.00 an hour. It is in such a rather complicated way that Hayward requires comparisons to be made, term by term, through the two contracts, the man's and woman's.
3. With that approach in mind the Tribunal here set out to establish the appropriate hourly rates for Mrs Carter on the one hand and her chosen comparator, Mr McCarroll, on the other. There may be a simple error in the Tribunal's computation as in paragraph 35 they refer to £3,197 and later, in paragraph 37 to £3,179 - a very minor difference but it might represent some form of error. More importantly, Mrs Carter argues that it was wrong of the Tribunal to knock off from her total number of hours worked the 280 hours and the 163 hours referred to in paragraphs 32 to 34 of the Tribunal's decision. They represented the Tribunal's view of what paid holiday hours came to in number. If they were to be added back into the computation, as she says is right, her hourly rate would fall to about £4.16 an hour, so increasing the gap between her and Mr McCarroll and thus the amount that she might be entitled to claim.
4. We see the good sense of the Tribunal's exclusion of the holiday hours but we do regard it as an arguable issue as to whether or not they should have been excluded, bearing in mind the detailed form of argument that is required following the Hayward case. So there is a point that we think should go to a full hearing.
5. But that is not an end of the matter. The decision was sent to the parties on the 15^th June 1999, so the six weeks for an appeal expired on 27^th July and Mrs Carter's notice of appeal was in time. No notice has yet been sent to the Club under rule 6.1. The grounds on which the Club may resist the appeal have not yet needed to be specified, nor has the time for a cross-appeal yet begun let alone has it expired. However, by a letter on 26^th August 1999, shortly after the Club learned of Mrs Carter's appeal, the Club wrote this to the EAT :

We are a small Club and a small employer with limited finances and resources at our disposal. The Employment Tribunal's decision in case number 2100098/99 was, in our view, and the view of our members, based on inappropriate case law, Mrs Carter is employed under a joint contract with her husband and enjoys, as part of their joint employment package, considerable benefits in making the comparison with her comparator, the Tribunal has ignored these benefits to come in line with the findings Hayward v Cammell Laird Shipbuilders. Is this the correct approach? And they said also:

We have always paid our employees consistent with the job specification and with the employment law and we would ask the Tribunal to take the opportunity of this appeal to review the fact and the findings in this case.

Remember, it may be that the Tribunal did ignore the totality of benefits. The Tribunal compared its computation of Mrs Carter's hourly rate with Mr McCarroll's and what they said was:

We therefore declare that the Club has contravened the implied equality clause within Mrs Carter's contract. The effect of that equality clause is to entitle her to be paid at a rate of £5.23 per hour.

6. There appears not to have been any consideration by the Tribunal whether that difference was "genuinely due to a material factor which is not the difference of sex" (see section 1(3) of the Equal Pay Act). The point does seem to have been taken below because at paragraph 12 and 13 the Tribunal say:

Mr and Mrs Carter live in a flat provided by the Club, on the Club premises. The Club bears their household bills (council tax, gas, electricity and water). Nor is there any need for a Mr & Mrs Carter to purchase a television licence. There are various other sums that Mr & Mrs Carter receive. In particular, they receive tips from members and a small amount profit on the sale of nuts, crisps etc.

7. It may thus be that an arguable point of law arises in the Respondent's favour, namely that the Tribunal should not have moved from simply the finding differential rates per hour to a finding of a breach of the act without first considering section 1(3). It is arguable that the Tribunal did not pay regard to section 1(3). This is a difficult area where even the House of Lords foresaw real difficulty. In Hayward in the House of Lords Lord McKay thought that section 1(3) might be used to explain a difference in pay if, at the very least, the unfair provision in the woman's term was due a difference in the opposite sense in the man's term and that the difference was not due to sex (see paragraph 25 in the IRLR Report). It would here, it seems to us, be arguable that the fact Mrs Carter got less was because of a number of differences. Mr McCarroll was not provided with a flat, was not provided with council tax, free gas, electricity or water, was not provided with a TV licence, and perhaps (we do not know what the facts are), did not receive tips or perhaps received smaller tips and perhaps did not receive profits from nuts and crisps etc, or profited less from them than Mrs Carroll. It is arguable, too, that those differences are nothing to do with a difference of sex.
8. So we permit the Carter appeal to go to a full hearing but Mrs Carter must realise that a cross-appeal may be generated. That will be for the Club to consider. The Club, like Mrs Carter, will receive a copy of +this judgement. It would be prudent if both sides could seek professional advice in this difficult area of the law. We have been helped today by Mr Hodgkins under the ELAAS Scheme and we are grateful for his assistance but at the full hearing it would greatly assist the Tribunal, as well as the parties, if professional advice could be brought to bear.
9. Of course, it may be that, if there were to be a cross-appeal, and were it to succeed, it might negate Mrs Carter's victory or reduce the sum recoverable to something hardly worth while. In fact, we have been told this morning that there has already been a remedies hearing but we do not know, and do not need to know more about that at this stage. It could be that if there is a cross-appeal the game becomes not worth the candle, to use the proverb. If there is to be a cross-appeal such as we have foreshadowed as maybe arguable and if there is going to be any difference between the parties at the full hearing on the subject of whether the difference between Mrs Carter's rate pay per hour and Mr McCarroll's is due to factors other than sex, then it could be that the chairman's notes of evidence will become material. It is hard for us to know to what extent the parties might think that notes of evidence are necessary but if, in the course of preparing for the full hearing, either Mrs Carter or (if it cross-appeals) the Club feels that the Chairman's notes are necessary on some particular point, then the best way of dealing with it would be for Mrs Carter or her advisers or the Club or its advisers to apply in writing to the President of the Employment Appeal Tribunal. I will then be in a position, having seen the case already at this stage, to give directions as to whether there should be chairman's notes, and if there should be, on what subjects.
10. Mrs Carter's appeal thus goes to a full hearing but she must be aware that a cross-appeal may be provoked and, so far as the chairman's notes are concerned, we make no directions on the issue of chairman's notes at this stage, but, if an issue does arise, then it can be dealt with in the way we have indicated.