United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR ROBIN ALLEN QC Instructed By: North Lambeth Law Centre 14 Bowden Street London SE11 4DS
For the First Respondent Wandsworth Borough Council	MR CLIVE SHELDON (of Counsel) Instructed By: Wandsworth Council Legal Services Administration Department The Town Hall Wandsworth High Street London SW18 2PU
For the Second Respondent The Secretary of State for The Department of Trade & Industry	MR NICHOLAS PAINES QC Instructed By: The Treasury Solicitor Queen Anne's Chambers 28 Broadway London SW1H 9JS


 


MR JUSTICE LINDSAY (PRESIDENT):

1. This appeal concerns the domestic provision which, broadly speaking, deprives employees of the right to complain of unfair dismissal where they are aged 65 or over at the dismissal. However, at this juncture, discrimination on account of age is not unlawful and so complaint against the provision, if to be raised, has to be tortured to fit the shape of an equal pay complaint on the footing (it is then said) that the domestic provision involves such disparity between its effect on women and men as to make it a breach of Article 141. The case then proceeds on the assumption that, on such a breach being shewn, the offending provision has then to be disapplied and the unfair dismissal claims accordingly become possible after all. This particular appeal, however, is not so much concerned with what is or is not a sufficient disparity between the effect on men and women to have that result as with whether the Tribunal's reasoning, that there was no sufficient disparity, involves error of law.
2. The facts are simple and are these. Wandsworth Borough Council, the first respondent, provides a bus service for transporting children with special educational needs to and from their schools. The Appellants, the applicants below, drive the buses. The practice of the Council was to retire members of its staff when they attained the age of 65 years, save in exceptional circumstances. The local government retirement age is 65 years. On 7th January 1998 the Appellants, then all at or over 65 years of age, were told that they would be dismissed at the end of March 1998. That was later confirmed. A collective grievance was raised but was unsuccessful. The dismissals as at the end of March 1998 took place. Originating Applications were presented to the Employment Tribunal in June 1998. The Council admitted and averred that the Applicants were dismissed by reason of age but asserted that section 109 of the Employment Rights Act 1996 denied the applicants the right, which they asserted, to claim for unfair dismissal. There was a hearing over 3 days in August 2000 at the Tribunal at London South under the Chairmanship of Ms C.E. Taylor. It dealt with several issues beyond that of section 109 but it is that issue alone which needs to be dealt with on this appeal.
3. On 31st October 2000 the Tribunal's unanimous decision and extended reasons were sent to the parties, then consisting only of the Appellants and the Council. The Tribunal held, inter alia:-

"(i) Pursuant to section 109 Employment Rights Act 1996 the right not to be unfairly dismissed does not apply to the dismissal of the Applicants. The Applicants' complaints of unfair dismissal are dismissed."

4. On 20th December 2000 the Employment Appeal Tribunal received the Appellants' Notice of Appeal, later amended in September 2001 after the EAT's decision in Harvest Town Circle Ltd -v- Rutherford [2001] IRLR 599, a decision given on 10th July 2001. The Secretary of State for Trade and Industry has been joined as second Respondent to the appeal.
5. The Appellants, appearing before us by Mr Robin Allen Q.C. and Mr Troop (the latter of whom had appeared for the applicants below) argue that the Tribunal was wrong not to disapply section 109; the Council, appearing, as it had done below, by Mr Sheldon, supports the Tribunal's decision. The Secretary of State, appearing by Mr Nicholas Paines Q.C. and Miss K. Smith, also support the dismissal of the appeal.
6. Before we return to this appeal we shall first look at the relevant statutory and other legislative provisions and then at Harvest Town Circle supra.
7. Section 94 of the Employment Rights Act 1996 confers on an employee a right not otherwise conferred, the right not to be unfairly dismissed by his employer. However, in the cases to which it applies, section 109 (1) undoes that right. It provides, so far as material:-

"109. Upper Age Limit

(1) Section 94 does not apply to the dismissal of an employee if on or before the effective date of termination he has attained -

(a) in a case where -

(i) in the undertaking in which the employee was employed there was a normal retiring age for an employee holding the position held by the employee, and

(ii) the age was the same whether the employee holding that position was a man or a woman,

that normal retiring age, and

(b) in any other case, the age of sixty-five."

It is not disputed but that on or before the effective dates of termination either the normal retirement age or the age of 65 years had been attained in the case of each appellant. Subsection (2) of section 109 provides a long list of instances where section 109 (1) does not operate but none is argued to apply. Instead Mr Allen relies on Article 141 (formerly Article 119) of the Treaty of Rome, as developed and interpreted in both European and domestic authorities. Article 141 provides, so far as relevant:-

"Article 141

1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.

2. For the purpose of this Article, 'pay' means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.

Equal pay without discrimination based on sex means -

(a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;

(b) that pay for work at time rates shall be the same for the same job."

It is not disputed but that the right to compensation for unfair dismissal concerns "pay" for the purposes of Article 141 - see Reg -v- Employment Sec., Ex Parte Seymour-Smith [1999] ICR 447 at p. 487, paragraph 30, ECJ, which also deals with the notion of objective justification - see paragraphs 66-77 - where something basically discriminatory is nonetheless not prohibited where it is a proportionate and necessary reflection of some acceptable social policy unrelated to equality of pay.

8. Seymour-Smith supra and its reception in the House of Lords at [2000] IRLR 263 H.L. were dealt with, along with other authorities, in Harvest Town Circle Ltd supra, a case in which the Employment Tribunal at Stratford had, at a preliminary hearing, held that, despite section 109, it had jurisdiction to hear a case of unfair dismissal of a man dismissed when over the age of 65 years. It held that section 109 had a significantly disparate effect on men and women. It was therefore indirectly discriminatory on the ground of sex and, the Tribunal held, there was no sufficient evidence of objective justification to allow section 109 to stand. The employer appealed to the EAT. In a reserved judgment in July 2001(which the Tribunal in our case at London South could not, of course, have known of when it considered matters in October 2000) the EAT set aside the decision of the Stratford Tribunal and remitted the matter for a more comprehensive and better informed approach to the statistics as to the effect of section 109 on men and women. We understand that the remitted hearing in Harvest Town Circle has required several days of hearing. We understand the hearing has concluded. The Secretary of State is now a party to Harvest Town Circle; the parties to it are thus now such as can deal more fully than before with the notion of objective justification. It is, we would expect, not improbable, whichever way the Stratford Tribunal decides it, that Harvest Town Circle will go higher, at least to the EAT.
9. It would undoubtedly have been more conducive to the homogeneous development of the law in this area if this Gidella appeal had awaited an EAT or Court of Appeal decision in the remitted form of Harvest Town Circle, where not only the statistics but also objective justification will have been examined in a detail not available in our Gidella case. However, the parties have pressed on to a hearing ahead of any new decision in Harvest Town Circle and we must deal with the appeal before us without such guidance as that case will ultimately yield.
10. In the course of its decision in Harvest Town Circle the EAT, indicating why it was critical of the statistics used in the case and their interpretation, set out an examination of the authorities which concluded with an attempted synthesis of them in its paragraph 18, page 603. Harvest Town Circle was not appealed to the Court of Appeal, nor, as we have understood them, has any party argued before us that the paragraph 18 synthesis was wrong in any material respect. Whilst that synthesis may, of course, be qualified or falsified by what is likely to become Harvest Town Circle (No. 2) or by other authorities, at this stage and for want of challenge to it we propose to adopt it without further study of the higher authorities on which it draws. Paragraph 18 of Harvest Town Circle at the EAT reads as follows:-

"18. Where does this leave us? Again leaving aside the cases where a smaller but persistent and constant disparity appears, we believe the authorities are to be synthesised and may be extended as follows:

(i) There will be some cases where, on the statistics, a disparate impact is so obvious that a look at numbers alone or proportions alone, whether of the advantaged (qualifiers) or disadvantaged (non-qualifiers), will suffice beyond doubt to show that members of one sex are substantially or considerably disadvantaged in comparison with those of the other.

(ii) However, in less obvious cases it will be proper for an employment tribunal, as the national court of fact, to use more than one form of comparison, no one of which is necessarily to be regarded as on its own decisive.

(iii) In such less obvious cases it will be proper for the employment tribunal to look not merely at proportions (as proportions alone can be misleading) but also at numbers, and to look at both disadvantaged and non-disadvantaged groups and even to the respective proportions in the disadvantaged groups expressed as a ratio of each other.

(iv) It will never be wrong for a tribunal to look at more than one form of comparison, if only to confirm that the case remains as obvious as it had first appeared. Moreover, if there is any doubt as to the obviousness of the case, the tendency should always be to look at a second or further form of comparison.

(v) As more cases of indirect discrimination are heard, a better feel, a more soundly based assessment of what is or is not properly to be regarded as a considerable or substantial disparity will develop. For example, in cases similar to it, regard will doubtless be had to the fact that in Seymour-Smith the ECJ found the 1985 disparity of 8.5% to be not considerable - see, supra [1999] IRLR 278 - and, when the case returned to the House of Lords, see Lord Goff at [2000] IRLR at p. 268 and Lord Nicholls at pp.269-270. Unfortunately, those seeking a simple and universal touchstone must be disabused; as numbers as well as proportions will be likely, save in the most obvious cases, to need to be taken into account and as different forms of comparison, of their nature, throw up different scales of difference, it would be a mistake (even leaving aside the cases of persistent but constant smaller disparities) to think that any disparity of less than 8.5% must necessarily be found not substantial or not considerable.

(vi) No distinction is to be drawn between a considerable and substantial disparity. That being so, it would be a mistake to conclude that anything that was merely not trivial or de minimis sufficed.

(vii) The employment tribunal, in such less obvious cases, after looking in detail at such figures as should have been laid before it, must then stand back, as it were, and, assimilating all the figures, is then to judge whether the apparently neutral provision, criterion or practice in issue has a disparate impact, be it on men or women, that could fairly be described as considerable or substantial."

11. As will later appear, one focus of this appeal will be upon whether our Gidella case is "so obvious" within subparagraph (i) of that synthesis or "less obvious" within (ii) and, if the latter, whether the fuller comparisons required in (iii) and (vii) were made.
12. The London South Tribunal had workforce statistics laid before it and a written witness statement from Professor Peter Elias of the Institute of Employment Research at Warwick University. His figures were not disputed. The approach taken to the statistics by the Tribunal was as follows. Section 109 applied, they said, to the whole workforce. The "pool" to be examined was thus the whole workforce. That pool in 1998 consisted of 11.578 million workers under 65 and 168000 over that age and of 14.261 million men under 65 and 266,000 over it. After setting out those figures the Tribunal continued:-

"41. Section 109 ERA applies to 98.17% of men and 98.57% of women; the difference is 0.4%. We find the difference in the statistics is not significant and we conclude that the Applicants have failed to demonstrate that s. 109 ERA has a disparate effect on men in the workforce.

42. We conclude that the Applicants cannot present a complaint of unfair dismissal under s. 94 (1) because the upper age limit contained in s. 109 (1) ERA applies ......"

13. Was that comparison between 98.17% and 98.57%, the only one the Tribunal made, sufficient to justify that conclusion?
14. Mr Allen and Mr Troop argue that it was not. If one looks at the whole workforce, they say, one looks at numbers of employees to whom unfair dismissal at 65 is so distant a possibility as to be without meaning. Although any age to be taken as a starting point is somewhat arbitrary, it would be appropriate to look at those only over 50. That the Tribunal never did. Moreover, they say, it is to be remembered that a disparity offensive to Article 141 can be shewn (objective justification apart) by a disparity between men and women which although neither considerable nor substantial is "lesser but persistent and relatively constant ... over a long period between men and women...." - Seymour-Smith [1999] ECJ supra at page 490 paragraph 61. The Appellants complain that although Professor Elias's statistics covered not just 1998 but 1992 to 1999 the Tribunal looked only at 1998 and hence failed to spot the "lesser but persistent and relatively constant disparity" which, they urge, the statistics disclosed. The Tribunal made no mention at all of Professor Elias's figures save to acknowledge that the applicants had relied on them. The statistics, say the Appellants, showed that for every 12 women disadvantaged by section 109, 19 men were disadvantaged. In such circumstances, say the Appellants, the cases cannot be described as "so obvious" but are in the "less obvious" category of Harvest Town Circle's paragraph 18 (iii). The figures should therefore have been first subjected to an analysis looking not just to proportions (98.17%, 98.57%, 0.4%) but to the numbers of individuals affected, to both the advantaged and disadvantaged groups and even to those as expressed as a ratio of each other. Then the overall assessment required by paragraph 18 (vii) should have been made. Secondly, there should, if necessary, then have been an examination of whether, that first test having shewn no considerable or substantial disparity, the lesser but enduring alternative was shewn. The Tribunal erred in law, say the Appellants, in not following such a course.
15. Mr Sheldon for the Council first argues that as section 109 applies equally to men and women it cannot be discriminatory. We reject that argument; were it right the massive Seymour-Smith litigation, it seems to us, would have merited only the shortest of answers - see also Council Directive 97/80/EC Article 2. Then, not quarrelling with Harvest Town Circle, the Council argues that this case is in the "obvious" category; a difference of only 0.4% for 1998 shews it to be so. A difficulty with this approach is that the "obvious" category in Harvest Town Circle was of obvious discriminatory disparity. Mr Sheldon is seeking to apply its approach to what is, he says, obvious non-discrimination. Moreover, when one looks at numbers of individuals affected, in 1998 alone there were 98,000 (266,000 - 168,000) more men disadvantaged than women and roughly 19 men disadvantaged for every 12 women. If Professor Elias's analyses were correct then, arguably, an alternative lesser but relatively constant disparity over a number of years was shewn. That might be said not to represent "obvious" discrimination but it would be harder to argue that it was "obviously" not discriminatory.
16. Mr Paines Q.C. and Miss Smith for the Secretary of State accept, rightly in our view, that, in Harvest Town Circle terms, this is not an "obvious" case. That though, puts them in the difficulty that if, on that account, the case is "less obvious" it did not receive the fuller analysis which paragraph 18 (iii) and (vii) of Harvest Town Circle suggests is proper, despite such an analysis being available (or arguably available) by way of the statistics laid before it, which include those of Professor Elias to which the Tribunal, as we have noted, failed to pay regard. If the Tribunal truly did pay regard to them but rejected them it would have erred in law in failing, in relation to so important a plank in the Applicant's case, to say why it had rejected them.
17. Of the arguments we have received we prefer that of the Appellants. The figures are certainly not such as enable us to say that there is obvious disparate impact such as to put the case within paragraph 18 (i) of Harvest Town Circle. Rather we see the case as a "less obvious", paragraph 18 (iii) case. It would be unfair to be critical of the Tribunal, and we emphasise that we are not critical of them, for not adopting the fuller Harvest Town Circle test, which did not exist at the time of the hearing before them. But, adopting paragraph 18 of that case as correct, there should have been, but was not, the look at numbers, at both the disadvantaged and the non-disadvantaged and to the proportions, each of the another, that paragraph 18 suggests. To judge from the skeleton argument Mr Troop put in below, it cannot be said that the applicants had relied below only on the 98.17 to 98.57% disparity or had disavowed reliance on the other comparisons which the higher authorities sought to be synthesised in Harvest Town Circle describe. There should then have been, but was not, the overall analysis which paragraph 18 (vii) of Harvest Town Circle requires. The Tribunal looked merely at 1998 alone and at the single comparison between 98.17% and 98.57%. That, in the subsequent light of Harvest Town Circle, was inadequate and in error of law. We thus allow the appeal and set aside the Tribunal's decision on section 109.
18. We must not, however, be thought to be saying that the Tribunal's decision was necessarily wrong. We cannot say what the result would have been had the full rigours of paragraph 18 of Harvest Town Circle been worked through and we have already said that the case, in our judgment, was not one of obvious disparate impact. The matter must therefore be remitted. There is no reason why it should not be remitted to the same Tribunal as before, it to deal only with the section 109 issue. As, by the time of such remitted hearing, a decision, at least in the Employment Tribunal, in the remitted Harvest Town Circle case will be likely to have become available and will, equally likely, have pointed to analyses of statistics far more sophisticated than were put in evidence in Gidella, it would be wrong to bar the Tribunal, on the remission, from receiving further evidence. It may be appropriate (though this will be for the Tribunal itself to decide) to have a directions hearing to establish how to deal with any further evidence sought to be adduced. Moreover, again in the light of developments in Harvest Town Circle (No. 2) (to call it that) "objective justification" may require to be dealt with as an issue and may require evidence to be directed to it. That, again, may best be dealt with at a directions hearing. Whether it will be convenient for the Gidella parties to await any appeal to the EAT or higher in Harvest Town Circle will be an issue to which consideration may need to be given.
19. Accordingly, for the reasons we have given, we allow the appeal and set aside the Tribunal's decision as to section 109 but remit the section 109 issue to the same Tribunal as before (unless, in the view of the Regional Chairman, it would significantly delay the re-hearing if the original panel had to be re-constituted). Further evidence may be received at the re-hearing, subject to such directions as the Tribunal shall itself have given in the interim.