United Kingdom Employment Appeal Tribunal

APPEARANCES

 

UKEAT/0559/05/LA For the Appellant	MR PHILIP ENGELMAN (Of Counsel) Instructed by: Messrs Stefan Cross Solicitors St Mary's Business Centre Oystershell Lane Newcastle Upon Tyne NE4 5QS
For the Respondent	MR JOHN BOWERS QC And MR SEAMUS SWEENEY (Of Counsel) Instructed by: Hartlepool Borough Council Legal Service Civic Centre Victoria Road Hartlepool TS24 8AY
UKEAT/0684/05/ZT For the Appellant	MR JOHN BOWERS QC And MR SEAMUS SWEENEY (Of Counsel) Instructed by: South Tyneside Metropolitan Borough Council Legal Services Town Hall & Civic Offices Westoe Road, South Shields Tyne & Wear NE33 2RL
For the Respondent	MR PHILIP ENGELMAN (Of Counsel) Instructed by: Messrs Stefan Cross Solicitors St Mary's Business Centre Oystershell Lane Newcastle Upon Tyne NE4 5QS


 


SUMMARY

Conjoined appeals – in the HBC case (Article 141) - Were the Claimants working at different establishments from their male comparators and, if so, were they in the same employment. In the STC case were the Claimants in the same service as their comparators (both being employed by the Local Authority)?


 


HIS HONOUR JUDGE PETER CLARK

1. The principal issue in these 2 combined appeals, coming before us for Full Hearing, is whether in each case the female Claimants can properly rely upon their chosen male comparators for the purpose of bringing equal pay claims. Both cases involve representative Claimants. In the first appeal, Dolphin and Others v Hartlepool Borough Council and Another (the HBC case) EAT 0559/05/LA, the Claimants appeal against the judgment of an Employment Tribunal sitting at Newcastle and chaired by Mr J R Barton (The Barton Tribunal) promulgated with Reasons on 12 August 2005, which held that they could not rely on their chosen comparators; in the second appeal, South Tyneside Metropolitan Borough Counsel v Anderson EAT/0684/05/ZT (the STC case) the Respondent below appeals against the judgment of an Employment Tribunal, again sitting a Newcastle and chaired by Mr J J L Hargrove (the Hargrove Tribunal) dated 18 October 2005, holding that certain Claimants, including those whose cases remain live, could rely on their chosen comparators. The Claimants in this case also cross-appeal on 2 issues; shortly described as the 'establishment' issue and the 'same service' issue. For the avoidance of doubt, the Appellants in the HBC case are those Claimants named in an agreed list supplied by the parties following the oral hearing before us held on 10-11 July 2006; the Claimants responding to the STC appeal are Ms Middleton, representing school caretakers employed by STC and Ms Reay, a school cashier. Both fell within the group of Claimants relying on 'White book' comparators, a description which we shall examine later.

Background

2. The Claimants in the HBC case worked as support staff (not teachers) in voluntary aided (VA) schools in respect of which the Local Education Authority (LEA) was the Local Authority (LA), HBC. They held posts including supervisory assistant (formerly 'dinner ladies'), school secretary, clerk and classroom/teaching assistant. An issue arose before the Barton Tribunal as to whether the Claimants were employed by the LEA or the Governing Body (GB) of the Schools at which they worked. That issue was resolved by the Employment Tribunal; they were each employed by the GB. Initially that finding was challenged on appeal but Mr Engelman has formally abandoned that challenge. We therefore proceed on the basis that they were employed by the GB.
3. The Claimants bring equal value claims under the Equal Pay Act 1970 (Eq PA S1(2)(c)), comparing themselves with male manual workers employed by the LA. Specifically, the supervisory assistants compared themselves with refuse loaders, collectors, road sweepers and others; the classroom assistants/clerks/secretaries compared themselves with painters, a joiner and a building labourer. None of the comparators worked within the VA schools concerned in these claims.
4. The relevant claimants in the STC case worked in community schools. Unlike the Claimants in the HBC case it is common ground that the STC Claimants were employed by the LA (STC), as were their chosen male comparators. They made JES claims under Section 1(2)(b) Eq PA, contending that both they and their comparators were employed on 'White Book' terms. The Hargrove Tribunal found that (mainly) manual workers' terms and conditions of employment with the LA were contained in the White Book, which set out terms and conditions agreed at NJC level following negotiations which took place in 1987 between LAs and the recognised Trade Unions. A single pay structure was introduced and, following a JES, manual jobs were allocated to six different grades (MG 1-6).

Equal Pay

5. The relevant provisions, for present purposes, are:

Article 141 (formerly 119) of the EEC Treaty

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

2. … '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."

Section 1 Eq PA

"(2) An equality clause is a provision which relates to terms … of a contract under which a woman is employed (the 'woman's contract') and has the effect that –

…

(b) where the woman is employed on work rated as equivalent with that of a man in the same employment …

(c) where a woman is employed on work which … is … of equal value to that of a man in the same employment …

…

(6) …

… men should 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."

Comparators

6. Since it is not contended in the HBC case that the relevant GB employing the Claimants is an associated employer of the LA and the comparisons sought to be made are with male employees of the LEA it follows that these Claimants cannot rely on Section 1(6) Eq PA to show that their comparators are in "the same employment" for the purposes of their equal pay claims brought under Eq PA. Accordingly they rely on Article 141 to bring those claims. In order to make the comparison for the purposes of Article 141 it is necessary for the Claimants to show that they are "in the same service" as their chosen comparators.
7. In the STC case it is common ground that both the Claimants and their respective comparators are employed by the LA. They are therefore not prevented from relying on Section 1(6) same employment on the ground that the Claimants and their comparators have different employers. However, in order to show same employment under Section 1(6) these Claimants must show either that both Claimant and comparator are employed at the same establishment or, failing that, that they are employed by the same employer at different establishments where common terms and conditions of employment are observed.

VA and Community Schools

8. We have been taken to the principal statutory provisions governing the organisation of both VA and community schools and the distinctions between those schools. We shall return to the detail, in so far as it is material, later in this judgment.

The HBC Appeal

9. For the purposes of the Article 141 claims brought by these Claimants the Barton Tribunal found:

(1) the Claimants were not employed in the same establishment as their chosen comparators. The establishment at which the Claimants worked was the school at which each worked. None of the comparators worked at a school.

(2) it was accepted by Mr Bowers that under Article 141 and the Equal Pay Directive the question was whether the Claimant and her comparator worked in the same service. That may involve separate establishments but a necessary, although not itself a sufficient prerequisite is the existence of a single source responsible for inequality in pay. Same service does not simply mean the same employer. The Employment Tribunal concluded that the Claimants and their chosen comparators were not in the same service (Reasons paragraph 88).

Same Service

10. In this appeal Mr Engelman submits that the Employment Tribunal erred in law in finding that these Claimants and their comparators were not employed in the same service.
11. The first issue is whether the Employment Tribunal was correct in holding that these Claimants and their comparators worked at different establishments. We are satisfied that they were by referring first to the ECJ approach in Rockfon [1996] IRLR 168, later applied by the EAT in MFS v Refuse Assurance [2002] IRLR 324. Although those cases were concerned with the meaning of "establishment" in the context of Section 188 Trade Union and Labour Relations (Consolidation) Act 1992, implementing the Collective Redundancies Directive 75/129, in considering the Directive, the ECJ in Rockfon determined that "establishment" meant the unit to which the workers made redundant were assigned. We see no reason to conclude that the word establishment means anything different in the context of European Equal Pay jurisprudence nor in Section 1(6) Eq PA. In the present case all the Claimants were assigned to work in schools; their chosen comparators were not.
12. Thus, the real issue is whether these Claimants can show that, despite working in different establishments, they were nevertheless in the same employment as their comparators by virtue of there being a single source responsible for the inequalities in pay. We think that Mr Bowers correctly formulates the question in this way; what is the body responsible for setting the terms and conditions of employment of which complaint is made and which can restore equality? Mr Engelman's answer to that question is the LA. Is that correct?
13. Until 31 August 2003 the position of VA and Community Schools was regulated by the provisions of the School Standards and Framework Act 1998 (SSFA). By Schedule 17, paragraph 20 SSFA it is for the GB to appoint persons to work in non-teaching posts. Those persons are employed by the GB. No person shall be appointed unless he meets the staff qualification requirements. Discipline of staff is under the control of the GB (paragraph 21); both the GB and Head Teacher may suspend staff (paragraph 23).
14. From 1 September 2003 the provisions of the Education Act 2002 (EA) and regulations made thereunder, the School Staffing (England) Regulations 2003 (SSR) replaced those provisions of SSFA. We accept Mr Bowers' submission, not, we believe, challenged by Mr Engelman, that the new statutory provisions did not materially alter the SSFA provisions. We note that "non-teaching staff" became "support staff" under Regulation 3 SSR.
15. As to the funding of both VA and Community Schools, it is common ground that the position is fairly summarised by the Barton Tribunal at paragraph 32 of their Reasons. There is a centrally retained schools budget managed by the LEA and individual schools budget (ISB) allocated to individual schools by way of a formula governed by statutory regulations (the schools delegated budget). It is the responsibility of the GB to determine its spending priorities. Significantly, employee costs come out of the delegated budget and it is for individual schools to determine their own staffing structure.
16. As to the appointment of support staff by VA schools, Regulation 15 SSR provides that the GB recommends a person to the LEA for appointment; accompanying that recommendation is a job description as to, among other things, the duties to be performed, the grade and the remuneration. The grade must be on the scale of grades applicable to employment with the LEA and such as the GB considers appropriate. Where the LEA has discretion with respect to remuneration it must exercise that discretion in accordance with GB's recommendation. The LEA may make representations to GB as to the recommended grade or remuneration to be paid. The GB must consider those representations and if it decides not to change the grade or remuneration it must give reasons in writing.
17. Mr Engelman submits that notwithstanding the structure of VA schools' staffing and budgeting in fact since all VA schools are "maintained schools" (as are Community Schools) and as such are strictly regulated by the LEA subject to supervision by the Secretary of State, in practice the VA schools support staff is employed by the LEA.
18. Mr Bowers, on the other hand, submits that on a proper reading of the statutory framework VA schools are run by the GB as a separate entity; operating autonomously in terms of engaging staff as employer and being responsible for staff terms and conditions, the cost of which must be met from their delegated budgets. We agree with Mr Bowers' analysis.
19. Nevertheless, Mr Engelman submits that, applying Article 141, there is a single LA, operating through the LEA; as a matter of common sense there is no reason to distinguish between School Support Staff and their LA employed comparators; whatever potential exists for GB to employ on different terms to the LEA, in practice GBs of VA Schools apply the same grades and remuneration to support staff posts as does the LA in relation to their employees carrying out work rated as equivalent.
20. Attractively though that submission was made as a matter of fairness, we must now consider the learning on same service and in particular the issue of a single source.
21. In South Ayrshire Council v Morton [2002] IRLR 256 the Scottish Court of Session held that where the pay scales of primary and secondary school teachers in Scotland were set by the Scottish JNC, a body set up by statute, a female primary school headteacher could compare her position with that of a male secondary school headteacher, although they had different (non-associated) employers and thus Section 1(6) Eq PA did not apply, for the purposes of an Article 141 claim. The Court's analysis depended on a reading of paragraph 21 of the ECJ judgment in Defrenne v Sabena (No 2) [1976] ECR 455 to be found in the EAT decision in Lawrence v Regent Office Care Ltd [1999] IRLR 148 to the effect that the concept of same service was to be interpreted in a loose and non-technical sense (Morton, paragraph 22). On the facts the Court of Session concluded that the claimant was correct in submitting that the statutory nature of the SJNC collective bargaining permitted the claimed comparison under the same service principle (paragraph 50). There was a uniform statutory regime governing pay and conditions in the public sector of education, allowing comparisons to be made across the boundaries of the authorities (paragraph 54).
22. Lawrence was referred by the Court of Appeal to the ECJ [2003] ICR 1092. The case involved the contracting out of cleaning staff by a LA to the Respondent, Regent. In their equal pay claim based on Article 141 employees transferred to Regent under TUPE sought to compare themselves with male employees retained in the LA service whose work had been rated equivalent in a JES. The ECJ held that whilst Article 141 did not limit a comparison to employees of the same employer, where the difference in pay could not be attributed to a single source, such as a collective agreement, there was no single body responsible for the inequality which could restore equal treatment and that the chosen comparison did not fall within the scope of Article 141. That holding is to be found in paragraph 18 of the Court's judgment (Page 1108 H) and reflects the Advocate-General's opinion, paragraphs 54 – 56 (1104 C - G).
23. The principle in Lawrence was considered by the EAT in Governors of Blessed Edward Jones High School v Rawlinson (EAT/0776/02/DM. 6 March 2003. Unreported). The Barton Tribunal (Reasons paragraph 55) found that there was no material difference on the facts between that case and the HBC case.
24. Mrs Rawlinson was employed by the GB of the school. For the purposes of an Article 141 claim she sought to compare her case with that of 2 male employees of the LEA. Having considered Schedule 17 to SSFA the EAT concluded that there was no single body responsible for the difference in pay. Keith J, delivering the judgment of the EAT, questioned whether Morton might have been decided differently had it been considered after the ECJ judgment in Lawrence (paragraph 10).
25. We should also refer to Robertson v DEFRA [2005] IRLR 363, where it was held by the Court of Appeal, upholding the EAT judgment [2004] ICR 1289 (Burton P) reversing the Employment Tribunal finding, that male civil servants employed in one government department (DEFRA) could not compare themselves for the purposes of Article 141 claims with higher paid female civil servants in a different government department in circumstances where there was no single body responsible for the discriminatory pay differences of which complaint was made. This was so even although there was a single employer, the Crown. A claim under Eq PA was not open to them since they were not employed under common terms and conditions of employment (Section 1(6)).
26. That brings us to the critical issue between the parties in this appeal. Is it enough, as Mr Bowers submits, that the power to determine terms and conditions of employment for support staff rested with the GB, so that the LEA was not the single source contended for by Mr Engelman, or is he correct in contending that, notwithstanding the power granted to GBs, on the evidence there was no difference in the terms and conditions applied by the GBs to those

pertaining to LA employees, rather that, insofar as findings were made by the Barton Tribunal, the pay scale to be found in the Green Book was implemented by the GBs. The Green Book succeeded the White Book in 1997.

27. In our judgment Mr Bowers is correct in his submissions to us, as he was below. The Claimants are unable to point to a single source which could restore equal treatment, either the LA, as Mr Engelman principally submitted, or the GB.
28. Further, we would uphold the Barton Tribunal's factual finding that the Claimants and their comparators were not in the same service for the reasons set out at paragraphs 88 – 89.
29. That disposes of the principal issue in the HBC appeal. We uphold the Employment Tribunal's finding that the appellant Claimants are not entitled to compare themselves with their chosen LA employed comparators. That leaves a secondary, discrete point on the limitation applying to the Claimants Mrs Price and Mrs Rennie (see Reasons paragraphs 91 - 92). Although we are urged to decide every point raised in these appeals (and the cross-appeal in the STC case) we have concluded that it is desirable only to decide those points which determine the appeals. Since Mrs Price and Mrs Rennie fail on the comparator issue, the question as time limits in these 2 individual cases, applying Preston, does not arise for decision in this appeal.

The STC Appeal

30. Here, it is accepted by STC that the relevant Claimants, Ms Middleton (and her fellow school caretakers) and Ms Reay were employed by the Council at Community Schools. Their chosen male comparators were also employed by STC. For the reasons given earlier in the HBC appeal we are similarly satisfied that the Hargrove Tribunal was correct in finding that the school Claimants were not employed in the same establishment as their comparators (Reasons paragraph 25.3). On this issue we reject paragraphs 1 and 2 of the Claimants' cross-appeal.
31. Thus, the first question is whether these Claimants can rely upon the definition of "same employment" in Section 1(6) Eq PA for the purposes of their claims under the Act.
32. Since they were employed at different establishments it was necessary for these Claimants to show that they were employed on common terms and conditions with their comparators.
33. The Hargrove Tribunal reasoning on this issue is contained at paragraph 25.6. They directed themselves as to the House of Lords decisions in Leverton v Clwyd County Council [1984] IRLR 28 and British Coal v Smith [1996] IRLR 406. From Leverton they deduced the principle that common terms and conditions may be derived from the same collective agreement, drawing a distinction between these Claimants (and others) relying on terms found in the White Book deriving from the same collective agreement and other Claimants relying on Red Book comparators, where they found that the White Book terms applied to claimants did not derive from the same collective agreement as that determining the terms and conditions of the Red Book comparators. Secondly, the Employment Tribunal found, based on the speech of Lord Slynn of Hadleigh in British Coal v Smith, paragraphs 39 and 44, that although the White Book comparators were not employed at the same establishment as the Claimants, common White Book terms would apply if they were so employed. Accordingly these Claimants were entitled to rely on their chosen comparators for the purposes of their claims.
34. In challenging that finding Mr Bowers submits that, as a matter of fact, schools would never require painters or drivers to work there and accordingly the dictum of Lord Slynn does not apply.
35. In our judgment that submission misstates the effect of British Coal v Smith. In our view what Lord Slynn was saying (paragraph 44) was not that, as a matter of fact, gardeners (to use his example) were employed at both establishments for the purpose of determining the common terms question. Rather that if gardeners were employed at both they would have common terms. Turning to the actual facts of British Coal v Smith, the female Claimant canteen workers and cleaners at 47 different establishments sought to compare themselves with clerical workers (half men and half of whom were women) and male surface mineworkers at 14 different establishments. The House of Lords held that there were common terms and conditions observed between the establishments, in the sense that they were substantially comparable on a broad basis, thus establishing "same employment".
36. In our view Mr Engelman is correct in submitting that, on their findings of fact as to the common application of the White Book terms by STC as employer to both the schools support staff claimants and their male comparators at other establishments, the Employment Tribunal's conclusion at paragraph 25.6 is unassailable in law. These Claimants were entitled to rely upon their chosen male comparators for the purposes of their claims brought under Eq PA.
37. The Hargrove Tribunal then went on to deal, as they were invited to do, with 2 further points directed to the alternative Article 141 claim, which they characterised as the single source of pay point and the same service point. They concluded that the single source of pay test was passed by the Claimants (paragraph 25.8) but that they failed to show that the claimants and comparators were employed in the same service.
38. Mr Bowers challenges the first of those findings; Mr Engelman the second by way of cross-appeal. However, since we have upheld the Employment Tribunal finding under Eq PA the alternative claim under Article 141 is rendered moot. As with the Preston point taken by the Claimants, Mrs Price and Mrs Rennie, in the HBC appeal, we do not find it necessary for determining this matter to rule on the competing arguments on the Article 141 claim in the STC case.

Conclusion

39. Both appeals are dismissed. For the purposes of these equal pay claims:

(1) The HBC appellant Claimants are not in the same employment or service as their chosen comparators for the purposes of claims under either Eq PA or Article 141

(2) The Claimants Mrs Middleton (and her fellow caretakers) and Ms Reay may rely upon their chosen White Book comparators employed in Council Departments for the purposes of bringing their claims under Eq PA.