United Kingdom Employment Appeal Tribunal

APPEARANCES

 

UKEAT/0025/07/ZT For the Appellant	Ms A Palmer (of Counsel) Instructed by: UNISON Legal Services Employment Rights Unit 1 Mabledon Place London WC1H 9AJ
For the First Respondent For the Second Respondent	Mr A Sharland (of Counsel) Instructed by: Messrs Matineau Johnson Solicitors No 1 Colmore Square Birmingham B4 6AA Ms A Palmer (of Counsel) Instructed by: UNISON Legal Services Employment Rights Unit 1 Mabledon Place London WC1H 9AJ
UKEAT/0026/07/ZT For the Appellant	Mr A Sharland (of Counsel) Instructed by: Messrs Matineau Johnson Solicitors No 1 Colmore Square Birmingham B4 6AA
For the Respondents	Ms A Palmer (of Counsel) Instructed by: UNISON Legal Services Employment Rights Unit 1 Mabledon Place London WC1H 9AJ


 


SUMMARY

Equal Pay Act – Part time pensions

In deciding two cases in accordance with Preston v Wolverhampton NHS Trust (No 3) [2004] ICR 993 EAT, the Employment Tribunal did not err in holding that the Claimant in one case did not have a fundamental change in her contract of employment but a series of gradual variations, and so was in time to bring her claim for equal access to a pension scheme.

Nor did it err in holding in the other that the parties twice envisaged "a whole new relationship of employment" and so her claim was out of time.

The EAT accepted that over a long career, particularly of office work, the nature of the work will change, there will be promotions and expansions of role, often in large organisations following application and interview, but these will not necessarily mean a new employment is created so as to start time running. The contract of employment and all the circumstances must be considered by the Employment Tribunal whose judgment then will be one of fact.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is about the time limits imposed on claims for equal access to occupational pensions schemes, following the judgment in a series of cases known as Preston, see Preston v Wolverhampton Healthcare NHS Trust (No.3) [2004] IRLR 96 and cases cited therein. The judgment represents the views of all three members sitting today. We will refer to the parties as they were at the Employment Tribunal from which this case arises. Mrs Winder and Mrs Campbell are the Claimants and Aston University is the Respondent.

Introduction

2. These are appeals on certain preliminary points in the longer judgment of an Employment Tribunal sitting over three days at Birmingham, Chairman, Mr A McCarry, registered with reasons on 8 October 2006. The Claimants were represented by a solicitor and today Ms Anya Palmer of Counsel. The Respondent is represented by Mr Andrew Sharland of Counsel. The Claimants claim they were denied access to a pension scheme as they worked part-time and that that was indirect sex discrimination. The Respondent took jurisdiction points on time and raised some points on the merits. We are concerned only with the former. The essential issue for the Employment Tribunal to determine was whether at the time of the claims in 1994 and 1995, respectively, they were still in the employment to which the claim related or were in radically different employment with the same employer, in which case their claims would be out of time.
3. The Tribunal decided, on the issues now relevant on appeal, that Mrs Campbell had one contract with gradual changes and was in time to bring her claim, for access in respect of a period from 1976 to 1986, the disputed period. Aston appeals. Mrs Winder had different contracts of employment and was out of time to bring her claim in respect of 1983 to 1993. She appeals. She was in time in respect of the period from 8 February to 31 August 1993. Aston cross-appealed, but that matter was taken no further following my disposal of it under rule 3. I gave further directions sending these cases to a full hearing by three members as it had been below.

The legislation

4. The relevant provisions of the legislation are not in dispute. This is a "standard case" under the Equal Pay Act s.2ZA(2) which requires a claim to be brought within the time of the employment or six months after its ending. It is not a stable employment relationship case, as for example in Preston. The Tribunal directed itself by reference to the relevant provisions and to what we hold to be the leading authorities, which it cited in its judgment.
5. We make one correction by agreement, which is to show that the Tribunal was referred to and focused upon the judgment of the EAT in Degnan v Redcar & Cleveland Borough Council [2005] IRLR 504 and not the Court of Appeal's judgment in that case which is reported at Degnan [2005] IRLR 615 and which does not deal with the issue in the case. This was a simple typographical error and does not effect the application of the principles by the Tribunal as it perceived them in this case.

The facts

Mrs Campbell

6. The Respondent is a major university located in Birmingham. It has a Business School. Mrs Campbell was employed by it on 1 May 1972 as a part-time Data Preparation Officer. In December 1984, she was offered a secondment to work in a secretarial capacity for a manager, Mr Abbott, initially for 12 months, which she accepted. There was no change in her contract except that she was paid an honorarium, of £200 on top of her salary, which was £6,200-odd. She started that secondment on 1 January 1985 and it was continued for a successive 12-month period on 8 January 1986. On 1 September 1986 she was formally given the job title of a full time secretary, although her remuneration did not change. This was described as a job title to reflect current working practice.
7. On 23 August 1990 she was placed on the secretarial salary scale at grade 3, and in December 1994 she presented her claim at the Employment Tribunal. She claims from April 1976 until 1 September 1986. In other words, it is conceded by Mrs Campbell that she cannot claim before the judgment in Defrenne [1976] ICR 547 ECJ, 8 April 1976, or after the time when she actually went full time.
8. The Tribunal looked at the documents in her case and the evidence which she gave orally, upon which she was cross-examined. She had originally been a Data Preparation Operator operating a system which was then common but which is now obsolete. The secondment involved a change in work location to move upstairs and to act in a secretarial capacity. At that time it was recognised that there was a change in the duties to be performed, for she was to be trained in secretarial and word processing skills. The Tribunal reflected upon the way in which her work was to be done. In 1990, when she was placed on the secretarial scale, it was noted punch-card data entry preparation had ceased.
9. The Tribunal accepted the arguments made on her behalf and said this:

"24. However, we prefer Mrs Goodman's arguments. We are satisfied that in Mrs Campbell's case there was one contract throughout, albeit successively extended until it became permanent. The variations occurred by stages, such that there was never a point at which one could say one contract ended and another began. There is no language in the documents that suggests new employment, simply a progression of duties whilst in one contractual relationship. Although there is no doubt that at the end of this transmission the work undertaken by Mrs Campbell was quite different from the punch card data processing she had originally carried out, the changes were in relatively imperceptible stages. There was no stage when there could be said to have been a move to a wholly different contract, such that the prior contract had been terminated. When she moved from the punch cards to the secretarial position, it was initially a move of a temporary nature, it being implicit, at first, that she could and possibly would be resuming her old duties. The temporary situation was initially recognised by the payment, not on a new salary scale applicable to secretaries, but of a small additional payment in the form of an "honorarium". No doubt the possibility of a move back receded as time progressed, but it was another 3 years before the situation could be said to have become permanent. What we observe in Mrs Campbell's case is a gradual change through honorarium, job title change to permanent secretarial position and eventually to the secretarial scale of pay. We find a series of gradual changes rather than a single transmission date at which one could identify that one contract had ended and another commenced. The situation is, we find, similar to Young and, the claim having been presented whilst Mrs Campbell was still within her employment, we have jurisdiction to entertain her case."

Mrs Winder

10. Mrs Winder commenced continuous employment as a part-time secretary on 3 December 1984, so far as is relevant to our proceedings. This was on a clerical salary grade 2, in what became the Business School. In July 1990 she applied, and succeeded at interview, for appointment as a Research Secretary Information Assistant in the Business School, this time on clerical grade 3 salary scale. It was recognised as continuous employment. The Tribunal said this:

"16. We accept that although there were similarities to her old job description (page 48), the exact nature of the work was rather different. Nonetheless, it was the Claimant's evidence that she continued largely in a secretarial role, albeit in relation to different work, the research element of the joining done in practice by another employee. She had previously worked with four people on a specific research project but her new position gave her a wider role and range of subjects, dealing with a larger number of people.

17. In January 1993, she was offered another change, which once more followed a procedure of application, interview, offer and acceptance (see page 30). Her acceptance can be seen at page 32, from which it is apparent that on this occasion she gave one month's notice to terminate her existing position before taking up the new one with effect from 8 February 1993. Again, the change of work involved a change of project. Her work location (although still within the Business School) changed also. Her new duties moved more academic work and contact with students. She remained on the same clerical grade III salary scale, but her real motivation for moving jobs was that she saw an opportunity to become full time and she did achieve this approximately 6 months later. When she did so, she did not take the opportunity offered to her of joining the pension scheme because by that time she had taken out a private pension plan. She told us that she enquired of someone in the Respondents' Wages office and had been told she could not be in two schemes at once and that her private one was better than the University's scheme. She acknowledged to Mr Sharland that her decision not to join the pension scheme (page 27) had been her own, but was adamant that it bad been based on advice from the Respondents.

25. The position with Mrs Winder, however, is, we find, quite different. In her case there were two quite distinct points in time when there was a wholesale change of section (although within the same department), duties and, in the first case, of her grade and scale. In each case, there was a competitive interview, followed by an offer Mrs Winder was free to accept or reject and the offer was accompanied by new contract terms. On the occasion of the second change, Mrs Winder even terminated her previous position by giving notice. It is apparent that the parties envisaged a whole new relationship, one 'employment' in the Preston sense was ending and another beginning. As Mrs Winder's claim was submitted more than 6 months after the date her first two employments ended, her claims prior to the last change in January 1993 are statute barred and are dismissed.

26. However, Mrs Winder remained in that employment from January 1993 until the date of presentation of her claim. Her claim in respect of that employment is clearly within our jurisdiction. That leaves a relatively short period from 8 February 1993 until 31 August 1993, being the date on which she was informed that, being full-time, she was eligible to join the pension scheme. Thereafter, it is clear that any detriment to her had ceased. Her failure to join the pension scheme was not now because she was excluded but because she decided not to join. Although that may have been understandable because, put neutrally, it depended either upon bad advice or misunderstanding of the advice she was given, the position nevertheless is that the detriment had ceased and she did, in fact, enjoy equality with full-time male colleagues. She is fixed with the consequences of what she acknowledges was her own decision not to join."

11. The Tribunal thus drew distinctions between the cases of the two Claimants. It upheld Mrs Winder's claim in respect of a period no longer in issue in this case from February to September 1993, and thus that is the period which if the judgment is upheld would be applicable to her.

The legal principles

12. The approach to these cases is regulated by Preston (No.3) above, and in particular the passages dealing with fundamental changes in contractual terms and variation, which are set out in my judgment at paragraph 107, 108, 109. To that can be added the judgment of Burton J, President in Degnan above, where there is a full discussion, both of my judgment and of previous authorities, at paragraph 40 where this is provided:

40 The relevant authorities are in small compass:

40.1 The first is Marriott v Oxford & District Cooperative Society (No.2) [1971] QB 186 CA, a redundancy case. The issue as to entitlement to redundancy depended upon whether, when an employee had agreed to continue in employment at a reduced wage and status, this amounted to a termination of the contract of employment, or a consensual variation. This was held to be a termination by the employer of the contract of employment, so that the employee was entitled to a redundancy payment.

40.2 Hogg v Dover College [1990] ICR 39 was an unfair dismissal case, where the issue was whether in a case where, again, an employee's status and salary were reduced, and he continued to work at the college, this amounted to a variation of the contract, by affirmation of what would otherwise have been the employer's repudiation, or a constructive dismissal followed by employment under a totally different contract. Again, the employee succeeded on the basis that there was a termination, by constructive dismissal.

40.3 Both these two decisions, perhaps not surprisingly, led to recovery of compensation for an employee, and neither were equal pay cases. The first equal pay case was HQ Service Children's Education (MOD) v Davitt [1999] ICR 978. The issue was not quite on point, because, although it was a six-month time limit question, it revolved around the fact that the applicant was not required to work after September 1997, but her notice period did not expire until March 1998. Section 2(4) of the EPA at that time provided that no claim could be made 'if she has not been employed in the employment within the six months preceding the date of the reference'. Judge Clark concluded at 983G—H that:

'In our judgment "employed in the employment" means employed under a contract of employment in which the equality clause relied upon for the purposes of the claim applies. It is on termination of that employment that time under s.2(4) begins to run. An employee may be off sick, on holiday or simply not required to attend work. Until the contract of employment is materially varied or terminated the employee remains employed in the employment.'

Mr Cavanagh QC submitted, at the tribunal, that there was relevance to this test of materially varied or terminated. Mr Cross submitted (as recorded at paragraph at 6.17(2) of the decision) that 'the observations in MOD v Davitt concerning material variation was obiter to the decision. There was no basis for the use of the term in the [EPA]'. The tribunal appears to have preferred the submissions of Mr Cavanagh, because it does express the test in terms of the two alternatives in paragraph 6.19(2) of the decision. However, in reaching its conclusion in relation to each applicant, it only addresses the question as to whether the earlier contracts have been terminated. It seems to us that termination is what is required, and that the only relevance of the words materially varied will be that, where there has been a substantial variation to the contract, it may be likely to be concluded that, in fact, there has been such a significant change that it can no longer be said that the original contract survives, but that what continues is, perhaps by reference to Hogg, a totally different contract of employment.

40.4 The most significant decision, being that of the Court of Appeal, and relating to the very issue in question (albeit still by reference to the old version of s.2(4) prior to its recent amendment) is Young, to which we have referred above. We have referred to the conclusion of the Court of Appeal that the applicant had one contract of employment throughout, notwithstanding changes in work content. At paragraph 10, Smith J recorded the submission of counsel for the employers, by reference to the first decision of the House of Lords in Preston [1998] IRLR 197, which had not been superseded by the decision of the Court of Justice in this regard:

'Lord Slynn of Hadley observed ... [at] 202 that the structure of the [EPA] appeared to be based on the incorporation of an equality clause into a specific contract of employment and not into an "employment relationship". In that case the term "employment relationship" was used to denote the whole period during which the women bad been employed under a succession of discrete contracts of employment. The House held that the word "employment" in s.2(4) referred to a discrete contract of employment. Mr Brown argued that when Mrs Young was moved from job to job by National Power, she had, in effect, a new contract of employment. Her "employment relationship" lasted from 1969 until 1996, but her contract of employment as a value for money analyst only lasted from 1991 until May 1995. Thus by analogy with the reasoning in Preston, her employment for the purposes of the application of s.2(4) to her claim for an equality clause based on her work as a value for money analyst meant her employment in that capacity.'

In paragraph 14 of her judgment, Smith J records the counter-submissions of counsel for the applicant:

'Here Mrs Young had only ever had one contract of employment, lasting from 1969 to 1996. The tribunal had not found that she had new separate contracts of employment whenever she changed jobs ... a continuing contract of employment must involve a continuing employment relationship, even if it embraced different jobs from time to time, and it would be incompatible with Community law if a woman was required to claim in respect of any such jobs before the end of the employment relationship.'

Subject always to the obiter caveat to which we have referred above, the decision of the Court of Appeal in Young is closely tied to the facts of the particular case and the findings by the tribunal in that case, and Mrs Young's counsel's submissions were preferred on that basis:

'18. ... "employed in the employment" in s.2(4) must mean "employed under a contract of service". That accords with the House of Lords' decision in Preston [1998] IRLR 197. There is a distinction within ss.1 and 2 between the words "employment" and "work". In our view, the distinction intended is that "employment" refers to the contract of the employment and "work" refers to the actual job the employee was doing. So, for example, for a claim under s.1(2)(c) a woman has to prove two distinct things: first that she was doing work of equal value to that of a man whom she names as her comparator, and second that she and the male comparator were in the "same employment". It is clear that the man and woman may be doing different jobs while in the same employment. So "employment" must relate to the contract of employment. Section 2(4) imposes a limitation period by reference to the termination of employment. In our view, there is jurisdiction, provided that the applicant brings her claim within six months of the termination of her contract of employment.

19. On the facts of this case, there was no finding by the tribunal that Mrs Young had had a new contract of employment when her work changed in 1991 or 1995.'

41 Finally there is that part of the judgment of Judge McMullen QC in Preston (No.3) in which he deals with this issue, namely at paragraphs 106 to 111. He refers in this passage to the judgment of Lord Parker CJ in Marriott, with the reference [1969] 1 WLR 254 at 258—9. This was the judgment of the Divisional Court in that case, which was, it seems, reversed by the Court of Appeal, as reported in [1970] 1 QB 186, referred to in paragraph 40.1 above: but, although the learned judge does not address, and seems not to have known, this (and the Court of Appeal judgments do not appear to have been cited to him) we are satisfied that the passages which he recites, and which were also influential with the tribunal, as appears from paragraphs 6.16(6) of its decision, are not affected, nor detracted from, by the reversal in the Court of Appeal, and indeed give helpful guidance. Judge McMullen QC said as follows:

'108. I do not accept that it was possible to vary a contract which had terminated. What followed the old contract was a new one, not its continuation in varied terms. I, of course, accept the principle set out in Marriott ... [1969] 1 WLR 254 per Lord Parker CJ, as to the essential distinction between a variation and a rescission, for he said, at p.259:

"An important consideration is the nature of the alleged variation. In order to amount to a rescission it must be so fundamental that nobody could claim that the original contract was still in being. On the other hand, the new terms may be on such minor matters that really the only common sense of the case is that the original contract is in being, subject to slight variations. In other words, each case must depend upon the circumstances of the case."

109. That case concerned the reduction in pay, and demotion, of a worker where it was held that his agreement thereto constituted a variation and the circumstances were not a dismissal giving rise to a redundancy payment.' [It is thus clear that the learned judge did not appreciate the existence of the subsequent decision of the Court of Appeal] '... Lord Parker reminded himself, at p.258, of the essence of the judgment of the House of Lords in Morris u Baron & Co [1918] AC 1 that:

"the answer to the question is always one of intention: was the intention to make a new contract, in which case the old contract was rescinded, or was the intention merely to treat the old contract as in being but with certain variations."

13. In that case it was accepted that the correct approach is for a Tribunal to consider the following:

"In the absence of a document, with which the new particulars of employment can be compared, at the very least we would have expected more assessment of the change of job, duties, status and pay, than is to be derived simply from a conclusion that the new job was an old Purple Book job, as opposed to an old White Book job. We are satisfied that the tribunal has given inadequate reasoning for its conclusion."

As can be seen from that judgment, relevant to the consideration in this case is the judgment of the Court of Appeal in National Power v Young [2001] IRLR 32, summarised by Burton J above.

14. The approach to the assessment of whether a contract remained one contract or whether there has been a break is set out in my judgments in Secretary of State for Health v Rance & Others [2007] IRLR 665 and Thatcher v Middlesex University (UKEAT/0134/05). In essence the question is: has there been a continuation of work broadly in the same manner, or has it been subject to a fundamental or radical change, or a change in the nature of the contract? See for comparison London Borough of Brent v Shah (UKEAT/0029/07).
15. Where it is sought to criticise a Tribunal on the ground of perversity, the threshold to be crossed with an overwhelming case is high, see Yeboah v Crofton [2002] IRLR 634. A Tribunal must give adequate reasons for its judgment, see Meek v The City of Birmingham District Council [1987] IRLR 250 Court of Appeal.

The arguments in Mrs Campbell's case.

16. On behalf of the Respondent it is contended that the Tribunal erred in its approach to the assessment of whether there was a variation or a fundamental change. Application of the judgment in National Power v Young indicates that different work was required to be done by Mrs Campbell. Wages and status had been changed in accordance with the principle set out in Degnan. There was a fundamental change in the work done between being a punch operator and secretarial and word processing duties. There had been a failure to recognise that training was required for both word processing and secretarial. In short, the two principle contenders were that on 1 May 1988 the contract had been fundamentally changed, but if that was rejected then the second contender was 1 January 1985.
17. On behalf of the Claimant it is contended that it was possible to agree, as in Mrs Campbell's case, that there was to be a promotion by consent as had been indicated in the judgment in Ashworth J in Marriott, cited above in Preston (No 3). There was agreement to secondment on both occasions. There was a change in the job title and there was assimilation to a grade. The difference in the Young case as to there being a flexibility clause, was not fatal or relevant in this case.

Mrs Winder's case

18. On behalf of Mrs Winder it is contended that the Tribunal should apply the same approach so that there was simply a variation. The Tribunal confused the nature of the job changes. Reliance was placed by the Respondent and accepted by the Tribunal on a change on two dates, as constituting a termination of the relevant employment. That was primarily on 1 September 1990, when the Claimant was changed to a Research Secretary, and on 8 May 1993, when she was changed to Division Secretary.
19. It is contended on her behalf that the letters are the same in both her case and Mrs Campbell's case and the Tribunal had made no comment on the letters which did make changes but did not change the contractual relationship. There was nothing to put her on notice that an equal pay claim should have been made at that time, and that reflected upon the requirement that there should be focus upon the intention of the parties.
20. On behalf of the Respondent it is contended that the judgment is Meek-compliant in that full reasons have been given, and the intention of the parties is plainly described by the Tribunal when it uses the words "the parties envisaged a whole new relationship."

Discussion and conclusions

21. We have decided to reject both appeals. Turning first to Mrs Campbell, the Tribunal made a decision that the changes made were incremental. Two things must be noted about both of these cases in the context of their history: they are very old cases; they involve employees of very long service.
22. First the nature of most forms of work, and certainly office work, has changed substantially over the last 30 years. Mrs Campbell is a good example. No one punches cards to store data anymore; this became obsolete by about 1990, at least at this modern university Business School. Secondly, long-serving employees' jobs evolve over time, they enlarge; the employees get promoted. Mrs Winder is a good example of this. Both of those factors need to be borne in mind when considering whether there has been a fundamental change. If the material available is solely documentary then a question of law arises. If, as is often the case, there is a consideration of evidence relating to the work being done this must be weighed together with the documentary materials, see Shah and Thatcher. Thus the approach to our assessment of these cases must bear those factors in mind.
23. As we have said, Mrs Campbell's work was found to have evolved through a series of gradual changes. True it is that the Tribunal makes a firm finding that her job at the end was very different from what it was at the beginning in 1972. But the correct approach is to look at whether, on each occasion when there was a change, there was a variation or a rescission of the whole contract. The Tribunal found that these incremental changes were simply variations. We agree that that approach is correct. A contract can evolve and, in the experience of the lay members here, does evolve over time and changes are made without there being a necessity for a notice of termination and a new appointment. Often changes occur by the addition of new duties in exchange for new money.
24. Mrs Campbell is a paradigm case. Certainly the changes which involved her secondment honorarium can only have been described as temporary changes and, as the Tribunal noted, she could have gone back. Thus over time a series of small changes led to what became a radical change in job, but the question is whether or not there was at any particular time such a change as to evince an intention by the parties to give up one job and to start another. The Tribunal held that this had not occurred and we respectfully agree. The Tribunal has found the facts and applied the law correctly.
25. As for Mrs Winder, the Tribunal applied the same law and came to a different conclusion. How can that be? The answer is that the facts were different. In this case the Tribunal has listed a series of factors which it considered when looking at whether there was a fundamental change in the nature of the contract beyond a simple variation. We have recorded them from its decision at paragraph 25, these include: the nature of the appointments, that is, application, interview and termination by notice. At least in the second change by Mrs Winder of her contract; the intention of the parties is expressed as one creating a new relationship, this in our view is important; so is the assessment of the evidence which she gave.
26. The Tribunal notes Mrs Winder's evidence that her work continued largely in a secretarial role when she was appointed in 1990 to the Research Secretary Information Assistant position in the Business School. The research element was done by another employee. Those are matters of fact for the Tribunal to consider. It had in mind that they were changes in the work that was done. It had in mind the evidence which she gave and which it appeared to accept, and yet the Tribunal came to the conclusion that there were such changes in the position which she adopted.
27. In the second case in 1993, the Tribunal approached the matter in the same way. It acknowledges that there were changes in the duties of the Claimant and came to the conclusions which we have recorded above from paragraphs 17 and 23 of the judgment. Our own view of this position is that a Tribunal, as here, should find the facts and consider the documents and having considered the law to make its own conclusion. We ourselves may have differed as to whether or not there was a simple variation in 1990, or indeed in 1993, but that of course is to miss-state the function of the EAT on appeal. The duty of the Tribunal is to make the assessment we have outlined and to give reasons for it.
28. In relation to the criticism of poor reasons, we reject this. The Tribunal has given a clear account of its reasoning from which the parties can well understand the judgment to which it came. And as to the contention that the Tribunal erred in law or as it was at one stage said, made a perverse decision, we reject both of those submissions.
29. The difference in the treatment of the two Claimants is explicable by reference to the finding of different facts. Lest it be thought, that the sole difference between the two was that Mrs Winder had been subjected to an interview process, the Tribunal put into the scales a number of other factors, such as the change in her section, her duties, her grade and the scale of pay.
30. For all those reasons therefore we see no error in the approach of the Tribunal in either of these cases. We would very much like to thank both counsel for their help which they have given.