United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR MOHAMMED A HAY (of Counsel) Instructed by: Messrs Thompsons Solicitors Acresfield 8 Exchange Street MANCHESTER M2 7HA
For the Respondent	MR JOHN RATLEDGE (of Counsel) Instructed by: Messrs Pannone LLP Solicitors 123 Deansgate MANCHESTER M3 2BU

SUMMARY

Statutory Discipline and Grievance Procedures – Whether applicable – Whether infringed

Was the modified or standard grievance procedure applicable? The Employment Tribunal found the former, and held that the grievance did not identify the basis of the claims which were subsequently lodged with the Tribunal. Therefore the Tribunal had no jurisdiction to hear the equal pay claims advanced. The EAT held that the tribunal had properly applied the law and the appeal failed.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. The outcome of this appeal turns principally on the question of whether the appropriate grievance procedure which applied to the grievance lodged by the employee was the standard grievance procedure pursuant to paragraph 6 of schedule 2 to the Employment Act 2002, or the modified grievance procedure pursuant to paragraph 9.

The statutory provisions.

2. In this case it is helpful to set out the relevant statutory provisions before turning to the facts. Part 3 of the Employment Act 2002 introduced statutory dispute resolution procedures. Schedule 2 to the Act sets out the procedures. Two procedures relate to grievances on the part of employees. They are termed respectively the standard grievance procedure and the modified grievance procedure.
3. There are three steps in the standard procedure which are as follows:

Step 1: statement of grievance

6. The employee must set out the grievance in writing and send the statement or a copy of it to the employer.

Step 2: meeting

7.—(1) The employer must invite the employee to attend a meeting to discuss the grievance.

(2) The meeting must not take place unless-

(a) the employee has informed the employer what the basis for the grievance was when he made the statement under paragraph 6, and

(b) the employer has had a reasonable opportunity to consider his response to that information.

(3) The employee must take all reasonable steps to attend the meeting.

(4) After the meeting, the employer must inform the employee of his decision as to his response to the grievance and notify him of the right to appeal against the decision if he is not satisfied with it.

Step 3: appeal

8.—(1) If the employee does wish to appeal, he must inform the employer.

(2) If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.

(3) The employee must take all reasonable steps to attend the meeting.

(4) After the appeal meeting, the employer must inform the employee of his final decision."

4. By contrast there are only two steps in the modified procedure, which are as follows:

Step 1: statement of grievance

9. The employee must-

(a) set out in writing-

(i) the grievance, and

(ii) the basis for it, and

(b) Send the statement or a copy of it to the employer.

Step 2: response

10. The employer must set out his response in writing and send the statement or a copy of it to the employee."

5. It will be apparent that the main differences between the procedures are as follows. At stage one, the standard procedure only requires the employee to set out the grievance in writing, whereas the modified procedure requires the employee to set out in writing both the nature of the grievance and the basis for it. Under the standard procedure the basis of the grievance need not be disclosed at step 1; it is enough that it is provided in advance of the meeting. The modified procedure makes no provision for a meeting and envisages only a written response by the employer. Finally, the standard procedure makes provision for an appeal, whereas the modified procedure does not.
6. When is the modified procedure applicable? The answer is provided by the Employment Act 2002 (Dispute Resolution) Regulations 2004 ('the DRR') read with Schedules 3 and 4 to the Act. These Regulations are complex. Their effect is that usually the standard procedure will be applicable. The circumstances in which the modified procedure will apply are set out in regulation 6(3):

"Subject to paragraphs (4) to (7), the modified grievance procedure applies in relation to a grievance where –

(a) the employee has ceased to be employed by the employer;

(b) the employer –

(i) was unaware of the grievance before the employment ceased, or

(ii) was so aware but the standard grievance procedure was not commenced or was not completed before the last day of the employee's employment; and

(c) the parties have agreed in writing in relation to the grievance, whether before, on or after that day, but after the employer became aware of the grievance, that the modified procedure should apply."

In short, the modified procedure requires the agreement in writing of the parties.

7. If an employee fails to complete step one of an applicable grievance procedure, the consequences are draconian. The employee in that situation may not present a complaint if it concerns a claim in relation to which the requirement to lodge a grievance applies. This is made plain by section 32(2) of the Employment Act 2002 which is as follows:-

"32 Complaints about grievances

(2) An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if-

(a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and

(b) the requirement has not been complied with."

It is not disputed that equal pay claims are matters in respect of which the grievance procedures apply.

The facts.

8. The claimant worked for the Oldham Metropolitan Borough Council until 1 April 2002 when there was a transfer pursuant to the Transfer of Undertakings Regulations to the respondent. The claimant worked as a warden supervisor for the respondent which manages a housing stock owned by the council. The respondent has close links with the council, but is independent from it, and is a company limited by guarantee. The council is the sole shareholder.
9. The claimant left employment on 4 August 2006. On 15 January 2007 Mr Westley, an official of Unison, her trade union, wrote a letter to Mr Karl Smith, who was the respondent's Human Resources Manager, stating that it was a Step 1 grievance letter in line both with the internal procedures of the company and in accordance with the Employment Act 2002. The nature of the complaint was set out and the letter added:

"I would be grateful if you would confirm that it would be appropriate to use the modified statutory grievance procedure."

10. The grievance was summarised in nine numbered paragraphs. After briefly setting out the history of the claimant's employment, the nub of the grievance was expressed as follows:

"Despite the fact the Claimant's post was rated as equivalent to that of other posts she did not have the benefit of terms to which male members of staff employed by the Respondent are entitled. These benefits included are:

A bonus scheme paying a substantial amount of basic pay,

Enhancements to basic pay for [working weekends of time and a half for Saturdays and double time for Sundays] on the same terms as men rated as equivalent.

For the avoidance of doubt this is not an exhaustive list of benefits.

The Claimant contends that it is not necessary to name comparators as the essence of the entitlements is the job the employee does and the fact that it is only jobs performed principally by men that receive these entitlements. However, the Claimant will in particular rely on all Respondent's male manual workers noted as being on the same grade as her. The Claimant invites the Respondent to provide details of the same."

The letter then focussed on the case with respect to bonuses and noted that the employers had been alerted to their obligations but failed to heed them.

11. By letter dated 17 January 2007 Mr Ruane of Unison's Equal Pay Unit wrote to the council's Human Resources Manager, Ms Walton, stating that the members no longer agreed to the use of the modified statutory grievance procedure and wished to use the standard procedure. It is common ground that the respondent never received a copy of that letter. It was not addressed to them, nor forwarded to them by the council.
12. Mr Karl Smith responded to the original letter from Mr Westley of the 15 January by a letter dated 19 February. In that letter he wrote:

"I note that your letter was intended to stand as a grievance under the Dispute Resolution Regulations 2004 and I will deal with it on that basis. In principle, and subject to what I say below, I am happy to deal with the letter under the modified statutory procedure and as you know that means that the grievance will be dealt with in writing in accordance with the timescale to which I refer below.

13. There was then a detailed response, paragraph by paragraph, to the points raised in the original grievance. In particular, it was denied that the claimant had been rated as equivalent to any other employee receiving a bonus or enhancement of the type specified, and the point was made that it would be useful to have the particular grade or job of the person or persons relied on as the appropriate comparator in order for the grievance to be assessed. Then in the final paragraph Mr Smith said this:

"Whilst I am happy to treat your letter of 15 January as a grievance and to deal with it under the modified procedure, I think that process would be meaningful only if you provide me with a response to the points I have made above."

The letter concluded that Mr Smith proposed to deal with the grievance on 28 February 2007 and invited further information before that date so it could be taken into consideration when dealing with the grievance.

14. A response was received asking for more time to provide the information sought, and this was agreed. Then on 20 March Mr Smith wrote further to Mr Westley recounting that notwithstanding the extension of time, he still had not received any response. He asked whether Mrs Riley still wished to pursue her grievance. There was some dispute as to whether this letter was ever received. The Tribunal was in fact prepared to accept that it had not been although they heard no direct evidence from those to whom it was sent.
15. The employment judge noted that there was no final resolution of the claimant's grievance but added:

"I am satisfied that it would have been impossible for the respondent to usefully do so in the absence of the further information it had requested from the claimant."

16. The claim to the Tribunal was then lodged on 3 May 2007, both against the respondent and against the council as second respondent. This sought to contend that the claimant's contract was less favourable in a whole series of ways than the terms afforded to certain identified comparators. These comparators were set out in a schedule. They were very different from those identified in the letter of 15 January. In particular, the claimant had originally specifically named only manual workers of the respondent of the same grade as the claimant. In the subsequent claim she sought to compare herself with male manual workers employed by the council in grades four and five (she was grade four), and also with craft workers which had not, even as a category, been identified at all in the 15 January letter.
17. On 10 May 2007 Unison sent a facsimile letter to Mr Karl Smith dated 3 May 2007. This letter stated:

"I confirm that our member does not consent to using the modified procedure and instead wishes to use the standard statutory grievance procedure."

The letter also identified the same list of comparators as were contained in the claimant's claim form.

18. The claim against the council was subsequently dismissed by consent and was pursued only against the respondent.

The Tribunal's decision.

19. The first issue was whether the standard or modified procedures were the applicable ones. The employment judge referred to regulation 6(3) (reproduced above) and noted that paragraphs (a) and (b) were plainly satisfied since the employee had ceased to be employed at a point when the employer was unaware of the grievance. The only issue was whether paragraph (c) had been met. Was there an agreement in writing that the modified grievance procedure should apply?
20. The claimant contended that there was not, for two reasons. First, prior to the letter from Mr Smith, the union had notified the personnel officer of the council that Ms Riley wished the standard procedure to be adopted. This was before the letter from Mr Smith had been sent. Although it was not a letter to the respondent, so close was the connection between the two organisations that the knowledge of the letter ought to be imputed to the respondent. Accordingly, by the time he sent the letter, the offer to use the modified procedure had been withdrawn. Second, it was submitted that the employer's agreement to use the modified procedure was always conditional on the receipt of further information; a conditional agreement is not an agreement.
21. The respondent argued that they could not be imputed with the knowledge of the council, and that read properly, the correspondence showed a clear agreement in writing as the regulation requires.
22. The employment judge accepted the respondent's submissions. He held that they could not be deemed to have knowledge of a letter sent to the council's personnel officer which was not even addressed to them. Also, he was satisfied that Mr Smith's reply to the original grievance letter constituted an agreement to adopt the modified grievance procedure. The judge relied in particular on the passage in the final paragraph of the letter which I have set out above.
23. The next issue was whether the claimant had complied with the modified procedure. There are two inter-related limbs to this argument. First, did the grievance letter include the basis as well as the nature of the grievance? Second, was the claim ultimately lodged in the Tribunal the same, or substantially the same, as that identified in the grievance? The employment judge answered both questions in the negative. He said this (para 6):

"…The claimant contends that the letter of 15 January 2007 sets out the basis of her grievance against the respondent. I am not satisfied that it does. The letter of 15 January 2007 is clearly lacking in any particularity. It simply states that the claimant will rely on all the respondent's male manual workers noted as being in the same grade as her but there is no proper indication of the type of male colleague in respect of whom her grievance is said to apply. Further, there is no proper indication as to the type of additional payment in respect of which the claim is being made. Moreover, there is no proper indication of the type of work in comparison with which equal value is claimed. In the circumstances I am [not] satisfied that the letter of 15 January 2007 sets out the basis of the claimant's claim. Indeed I am satisfied, adopting the words of the Employment Appeal Tribunal in the Pratt case, that "it would be quite impossible for the (respondent) to respond usefully to this letter except (as it did) by asking for further information as to the basis of the complaint being made". Further, or in the alternative, even if I had been satisfied that the letter of 15 January 2007 had set out the basis of a claim I am satisfied that it did not comply with Step one of the modified grievance procedure in relation to the claim actually made by the claimant in her claim form. This is because the letter of 15 January 2007 refers only to male manual workers employed by the respondent whereas the claim relates to male manual workers employed by the Council and to craft workers. It is further contended on behalf of the claimant that if she failed to set out the basis of her grievance in the letter of 15 January 2007, this defect was remedied by her letter of 3 May 2007 which was faxed to the respondent on 10 May 2007. I do not consider that this contention is well founded. I am satisfied that the claimant was required to set out the basis of her grievance before presenting her claim to the Employment Tribunal and that the statutory scheme does not enable a claimant to set out the basis of her grievance for the first time either in the claim form itself or in a letter sent after the presentation of the claim form."

(The "not" added in square brackets was omitted in the original decision, but that is clearly by mistake.)

The grounds of appeal.

24. The grounds of appeal are directed at all the findings of the Tribunal. It is submitted that the Tribunal erred in law in various ways. First, it is said that the Tribunal was wrong to conclude that there was an agreement to use the modified procedure. The claimant submits both that the original offer to agree that procedure had been revoked by the letter to the council, knowledge of which should be imputed to the respondent; and that in any event, the letter from Mr Smith responding to the grievance was, properly construed, only ever a conditional acceptance. It is submitted that the fact that the grievance was never resolved supports this analysis. Reliance is also placed on EU law, which it is said requires a purposeful approach to be adopted to a question of this nature, particularly since fundamental rights are in issue.
25. Second, it is said that the Tribunal erred in concluding that the grievance was too unspecific and that it did not reflect the claims subsequently lodged with the Tribunal. Mr Hay, counsel for the respondent, reminded me of the numerous cases where the EAT has emphasised that it is inappropriate to adopt a technical or legalistic approach to these procedures, and that the interpretation should, so far as possible, reflect industrial relations realities: see e.g. Shergold v Fieldway Medical Centre [2006] ICR 306 and Canary Wharf Management v Edebi [2006] IRLR 416. The original grievance indicated that the claims specified were not exhaustive and that further particulars may be needed. They could always have been provided in due course. It was plain that there was an equal pay case and the essential nature of the grievance was clear.
26. The respondent essentially relied on the reasoning of the Employment Tribunal.

Conclusion.

27. I will deal with the two broad areas of appeal in turn.

Was there an agreement to use the modified agreement?

In my judgment, the argument that the offer was withdrawn before the response from Mr Smith has no merit whatsoever. There is no basis for incorporating a doctrine of imputed or constructive knowledge. The two respondents are quite separate organisations. The fact that the respondent is owned by the council is not to the point. They have separate Human Resources departments, and the claimant cannot conceivably rely upon the fact that there are close links between the two organisations - but not necessarily the two departments - to infer that information given to the one is deemed to be information provided also to the other.

28. Indeed, I have to say that it is far from clear whether the letter to the council was ever intended to apply to the claim against the respondent. There was at the time that the letter was sent a separate claim against the council and it is perfectly possible that the letter was only ever intending to apply to the claim against them. It was not addressed to the respondent, and the fact that the respondent and the council were separately named in the claim demonstrates that it was appreciated by the claimant that they were different bodies.
29. Be that as it may, even if the intention was to withdraw the offer of using the modified procedure with the respondent, that was never achieved. Moreover, as Mr Ratledge, counsel for the respondent, points out, the claimant had many subsequent opportunities to indicate that she did not wish the modified procedure to apply, but she never did so.
30. The other basis for challenging the existence of the agreement raises the question whether the employment judge fairly read the letter of 15 February. This is a matter of construing the letter as a whole. I have considered the letter. It seems to me that the employment judge was correct to interpret it as he did. There are two particular passages in the letter to note. I have set them out above but repeat them for convenience here. First, Mr Smith said this:

"In principle, and subject to what I say below, I am happy to deal with the letter under the modified statutory procedure…."

Later, in the final paragraph, he says this:

"Whilst I am happy to treat your letter of 15 January as a grievance and to deal with it under the modified procedure, I think that process would be meaningful only if you provide me with a response to the points I have made above."

31. In my judgment, the employment judge was right to say that on a fair reading this was an unconditional acceptance that the modified procedure would apply. The earlier passage, it seems to me, is indicating that whilst Mr Smith was happy to deal with the issue under the modified grievance procedure, he would not properly be able to resolve the grievance under that procedure without the additional information he sought. In other words, the qualification he gave was not about which procedure should apply, but whether he could adequately deal with the matter under the modified procedure in the absence of further information.
32. The final paragraph puts that construction beyond doubt and is consistent with the interpretation I have given to the earlier passage; Mr Smith agrees to the modified procedure but is concerned that without further information it will not be meaningful. I do not think that this conclusion is inconsistent at all with the fact that the grievance was not resolved; on the contrary, that is wholly consistent with the employers taking the view that whilst they would determine the grievance in writing, they needed further information. Since it was never supplied, the grievance was not resolved.
33. I am also satisfied that in this case there is nothing at all in the point that EU law requires any different construction. EU law has absolutely no relevance to this issue. It is simply a question of how one construes a document. There is nothing intrinsically inconsistent with EU law to have a requirement that a grievance issue should be raised before claims can be made. Such a requirement does not act as an absolute barrier to employees pursuing their claims or render remedies ineffective, or anything of that nature. Moreover, it is not suggested that EU law in any way affects the construction that would naturally be given to the relevant statutory provisions. On this point the issue is solely a matter of domestic law and it is a simple question of construction.

Was the grievance satisfactorily identified?

34. I turn to the further finding of the Tribunal that the grievance procedure was not complied with, and that the claim as lodged did not properly reflect it.
35. These are really inter-related issues. I accept that had the claim before the Tribunal been that male workers of the same grade in the respondent's employment received a bonus payment which was denied to the claimant, that might have been a different matter. The basis of the grievance was at least arguably identified to that extent. However, the other elements of the claim were left at a wholly generalised level. In short, although it might be said that the basis of some claim had been identified, it was not the same claim, nor a claim substantially similar to, the claims finally lodged with the Tribunal. The grievance identified manual workers employed by the respondent in the same grade as the claimant; the claims identified manual and craft workers employed by the council.
36. It is, with respect, no answer for the claimant to say that it was enough simply to indicate that there were equal pay claims or that the respondent could always ask for further information. The respondent did indeed ask for further information, and none was forthcoming. Had it been forthcoming in sufficient time before the claims were lodged, that might have altered the picture. I appreciate these are very technical points but that, sadly, is how these procedures operate. I am satisfied that the employment judge reached the right conclusion and that there is no ground on which this appeal can be sustained.
37. This conclusion is supported by the decision of the EAT (HH Judge Richardson presiding) in City of Bradford Metropolitan Borough Council v Pratt UKEAT/0391/06. In that case too the claimant identified different comparators in the claim than had been named in the grievance, which as in this case was subject to the modified grievance procedure. This was held to be a fundamental failure to comply with the requirements of the statute.
38. Underlying this procedure, as HH Judge Richardson pointed out, is that the employer must have sufficient information in the grievance to enable him to respond in a way which might prevent the case having to go to a tribunal. How much detail is required will depend on the nature of the claim. The detail in the grievance need not be as detailed as in the subsequent claim form, but there must be sufficient material to enable the grievance to be properly addressed by the employer. In my judgment, the employment judge was right to say that such information was not provided here, not at least with respect to any of the equal pay claims subsequently lodged before the Tribunal.
39. For the record, I note that the claimant also submitted that the decision was not Meek compliant and that the decision was perverse. There is absolutely nothing in these points. It is plain why the claimant failed; and there was cogent evidence for each of the Tribunal's conclusions.

Disposal.

40. In my judgement the appeal fails and the Tribunal has no jurisdiction to hear these claims. I reach this result with real reluctance. The law is in this area imposing trip wires for employees which have these very harsh consequences if they do trip over them. However, I am satisfied that Mr Hay's challenge to the Tribunal decision in this case, and in particular his complaint of undue technicality on the part of the employment judge, was in truth really a complaint about the technical nature of the legislation itself.