United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR P CLARK (Solicitor) Messrs Stefan Cross Solicitors Buddle House Buddle Road Newcastle upon Tyne Tyne & Wear NE4 8AW
For the Respondent	MISS B CRIDDLE (of Counsel) Instructed by: Messrs Trowers & Hamlins Solicitors Third Floor Heron House Manchester M2 5HD


 


SUMMARY

Jurisdictional Points: 2002 Act and pre-action requirements

Equal Pay Act: Article 141/European law

Practice and Procedure: Appellate jurisdiction/reasons/Burns-Barke

The requirements for a Step 1 statement of a grievance are minimal. On a concession that a statement constituted a grievance when it was presented to a transferor, it was still a grievance when directed to the transferee, even though identified comparators had not transferred. It was not necessary to consider the issues in the subsequent Judgment in The Highland Council v TGWU and ors UKEATS/0020/07. Practice Direction paras 9.1 and 9.17 require that where parties know that two pending appeals may raise similar points, they should inform the Registrar, and certainly the hearing judge, so that the cases may be handled expeditiously.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is about the striking out of an equal pay claim because it was not preceded by a grievance complying with the procedure required under the Employment Act 2002 and the Regulations in 2004 made pursuant to it. I will refer to the parties as the Claimants and the Respondent. The postscript (para 27) should be read first.

Introduction

2. It is an appeal by the Claimants in those proceedings against a judgment of Employment Judge Hildebrand sitting alone at a PHR in Leeds, registered with reasons on 19 July 2007. The Claimants are represented by Mr Paul Clark, a solicitor of Stefan Cross Solicitors. The Respondent was represented there by a solicitor, who today instructs Miss Betsan Criddle of Counsel. The Claimants claimed equal pay. The Respondent contended that the claim should be struck out or dismissed on the merits for a number of reasons, but for the purposes of this appeal because the Tribunal had no jurisdiction for the Claimants had not followed the statutory grievance procedure.
3. The essential issue was defined by the Employment Judge as follows:

"1. … did the Claimants, comply with the provisions of Section 32 of the Employment Act 2002 by sending a Step 1 grievance letter to the Respondent before the claims were presented to the Tribunal?"

4. He struck out the claims. They appeal. Directions sending this to a full hearing were given in Chambers by His Honour Judge Richardson. The limited issue on this appeal is whether the Claimants failed to comply with the 2002 Act regime solely because the grievance was addressed to their former employer, the Council, and not their current employer, the Respondent.

The legislation

5. An equal pay claim tried in an Employment Tribunal must have been preceded by a grievance (see Employment Act 2002 s29). The standard procedure, which is relevant in this case, must include a Step 1 statement of grievance (see Employment Act 2002 Sched 2 part 2 paragraph 6). The employee must set out the grievance in writing and send the statement or a copy of it to the employer.
6. A grievance is defined in the Employment Act 2002 (Dispute Resolution) Regulations 2004 Regulation 21 - as follows

"Grievance means a complaint by an employee about action which his employer has taken or is contemplating taking in relation to him."

7. The consequence of a failure to comply with the standard procedure where it applies is that the Tribunal has no jurisdiction to hear a complaint based on material which is the same as that which should have been included in the grievance. The grievance must relate to the subsequent claim, and the claim must relate to the earlier grievance. So, for an equal pay claim to be tried by an Employment Tribunal it must have been preceded by a grievance about unequal pay. The issue on appeal is limited to the first of these two questions - whether the grievance presented complied with the Act - and I am not called on to conduct the comparative exercise of looking at whether the later claim corresponds to the grievance.
8. The purpose of the Regulations is to see to it that an opportunity is given to both sides of a dispute to resolve it before invoking the Employment Tribunal procedures and the statutory intervention of ACAS by way of conciliation. The Employment Judge referred to the legislation and to the relevant authorities, to which I will return.

The facts

9. The facts of this case do no credit to Stefan Cross Solicitors for the way in which that firm has handled the presentation of grievances to the Respondent or claims to the Employment Tribunal. Mr Clark accepts unreservedly that an error was made by the firm, that it behaved unprofessionally and what happened here should not have. The question is whether or not the failure by the solicitors to handle this matter properly deprives the Claimants of their right to a trial.
10. The Claimants are employed by the Respondent. They had previously been employed by Wakefield Metropolitan District Council ("the Council") until 21 March 2005 when a transfer of housing stock was occasioned. Their contracts of employment transferred either by statutory order, or by operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ('TUPE'), then in force. The Respondent is a housing association and employs 1300 people who, I am told, are principally former employees of the Council.
11. A year later in 2006, Stefan Cross Solicitors served questionnaires on the Council relating to equal pay. This is against the background of thousands of claims for equal pay made mainly by women in the North of England and Scotland against public sector employers. One of the principal firm of solicitors engaged by the Claimants to seek redress is Stefan Cross Solicitors. There have been many successes in this campaign. The firm is fully aware of the procedures relating to claims for equal pay before Employment Tribunals.
12. 18 months later on 26 September 2006, correspondence signed by Stefan Cross himself was directed to the Chief Executive of the Council in which this is said:

"I enclose statutory grievance on behalf of my clients

[The clients are named].

Please acknowledge safe receipt."

Attached to it is a document which begins as follows:

"WAKEFIELD METROPOLITAN DISTRICT COUNCIL STATUTORY GRIEVANCE Jacqueline Goodfellow

…

1. EQUAL PAY – JOB RATES AS EQUIVALENT or equal value

I am not paid the same as men doing jobs rated either the same or lower than me in that my hourly rate for all normal hours worked is less than the hourly rate for the men taking into account all monetary payments to them for normal hours worked. I compare myself with — THE FOLLOWING DEPENDING ON MY GRADE —(the letters refer to the representative men that you supplied in answer to equal pay questionnaires

Grade I — gardener I MC JH JW

ROAD SWEEPERS"

Thereafter a number of other grades is cited. And then there is this:

" 2. EQUAL PAY — EQUAL VALUE — RED BOOK EMPLOYEES — PRIOR TO TRANSFER to wdh

a. I believe that I am paid less than men employed on red book terms even though my job is of equal value to them."

That document is also signed by Stefan Cross.

13. On the same date an email was sent by Stefan Cross Solicitors to the Chief Executive of the Respondent, Mr Kevin Dodd, headed "Statutory Grievance" with this:

"Dear Kevin,

Please find attached correspondence regarding statutory grievances on behalf of 2 clients."

In that email are copies of the documents sent to the Council. An acknowledgement shows Mr Dodd having read this on the same date.

14. The Respondent took the position that this was not a grievance which corresponded to the statutory regime. And so when claim forms were presented on 15 January 2007 a jurisdiction point was taken. The Employment Judge said this:

"8. Applying those provisions to the circumstances identified in this case, my view is that Mr Dodd, on receiving the correspondence dated 26 September 2006, could not, on any reasonable reading, have any idea that the grievance which was being copied to him was actually being directed to him in relation to his employees. It could not, on any reasonable interpretation, be interpreted as requiring action from him in response to the grievance. It does not expressly relate to any action taken by him or contemplated by him. It refers to other individuals as comparators who are not employees of his organisation, and it is addressed to the Chief Executive of another organisation, namely the Council. Indeed the grievance is incomprehensible without reference to other documents, ie. the Questionnaire and Response, which passed between the Claimants and the Council. Although Mr Dodd may have been physically provided with the grievance, I do not accept that in this case the grievance was ever sent to the Respondent as a recipient with the intention of action."

In the light of that he concluded that there was no jurisdiction but he gave a clear indication of the limited reach of his judgment for he said this:

"9. Accordingly, it is my conclusion that the Claimants in this case failed to comply with Section 32 of the Employment Act 2002. This decision is limited in its impact to the procedural aspects, as I understand all the employees in question remain in the employment of the Respondent and that grievances can be presented, and in some cases may already have been presented, to allow fresh proceedings to be issued. Having said that, I do not accept that it would be right, because it may subsequently be regarded that a Grievance Procedure is of limited significance in the context of these cases, to decide at this stage that there is jurisdiction when none exists. The claims are therefore struck out."

15. Mr Clark told me that grievances had now been lodged and new claim forms had been submitted. Miss Criddle's instructions were that no claim form has been presented. The practical utility of this case, as I understand it from Mr Clark, is that if the Claimants present new claims, as they are all still employed by the Respondent, any award of damages for unequal pay might go back for six years; whereas, if the existing claims were maintained, the six years would reach back from January 2007 rather than, say, January 2008 if claims were lodged this week. Simply as a matter of reflection, Miss Criddle indicates that any award might well be affected by the ability of the Claimants to go back prior to the date of the transfer in 2005; in which case the chance of an award back to 2002 or 2001 is irrelevant. The Claimants will yet be met by an argument that the claim form cites comparators not in the "same employment" of the Respondent. Nevertheless, having canvassed with both advocates the practical utility of this case, a judgment is sought by both.

The Claimants' case

16. The Claimants' case is simplicity itself. The requirements of the statute are minimal. As a matter of fact the employees have a grievance. Leaving aside for a moment the heading of the document against the Council, it is a grievance. It is made in writing. It was sent to and received by the Chief Executive of the Respondent. It raises issues of equal pay. It cites comparators and thus Step 1 is complete The fact that the comparators do not work for the Respondent any longer, for apparently none of them came over on the transfer, might be a matter which would be relevant to step 2 which is setting out the basis, and for assessment when the claim form is presented, but, for the purposes only of Step 1, nothing more is required than was done here. Albeit the document was directed to the Council it was also in terms directed by a solicitor on behalf of his clients to the Respondent, their employer. Step 1 of the procedure was complied with. There was no grievance meeting upon it.

The Respondent's case

17. On behalf of the Respondent, it is contended by Miss Criddle that the Employment Judge's approach was correct. The Respondent was the wrong recipient. She accepts, of course, that there was a statement in writing; insofar as it is directed to the Council it is a grievance; it does indicate a complaint by a claimant about her pay; and it was received by Mr Dodd, who read it. What she argues, however, is that in the context the document can only be read as the Employment Judge read it by reference to the statutory questionnaire and response which were exchanged between the Claimants and the Council and not the Respondent. The purpose of these regulations is to coax an employer to take action in response to a grievance, and this grievance was not directed specifically to the Respondent nor to any action which it could take.

The legal principles

18. Underhill J described these regulations as rebarbative H M Prison Service v Barua [2007] IRLR 4 para. 1. They have created a good deal of difficulty for employers and employees alike. The approach to be employed in this case was set out by Elias P in Canary Wharf Management Ltd v Edebi [2006] IRLR 416 EAT where he said this:

"20. Second, the form of the grievance. There is considerable flexibility about that. It may be raised in a resignation letter (as here). It may even be raised after a dismissal has taken effect (indeed that is one of the conditions for the application of the modified procedures). It may be raised by a solicitor in a communication to the employer's solicitor (as in the Mark Warner case.) It matters not that other issues are raised at the same time as the complaint, whether additional complaints or otherwise. (See regulation 2(2).)

21. Third, the content. The contrast between the standard and the modified procedure highlights an important feature of the way in which the complaint must be made under the former. As we have noted, there is no obligation to set out the basis of the claim. It is enough, therefore) that the employee identifies the complaint. The need to substantiate that with some evidence to justify it arises under the standard procedure at the second stage where the employee has to inform the employer what is the basis of the grievance. The only requirement, as section 32(2) makes plain, is that the complaint to the employer must be essentially the same complaint that is subsequently advanced before the Tribunal. As Burton J succinctly put it in the Shergold case:

"the grievance must relate to the subsequent claim, and the claim must relate to the earlier grievance."

22. It is not even necessary that the employee should indicate that he wants or expects the complaint to be dealt with; he does not need to be actively invoking the grievance procedure, statutory or contractual. The paragraph is satisfied simply if the complaint is made. Once that occurs, the onus falls on the employer to arrange a meeting to deal with a grievance although the employee will then have to notify the employer of the basis of that grievance.

23. How then does one determine whether the relevant complaint has been made? In Shergold, Burton P said this at paragraph 28

"…the statutory wording…very simple, and we believe that it was intended to be simple. Of course an employee, before this statutory procedure is invoked, must set out something in writing, because otherwise employers will not necessarily appreciate that there is a grievance to deal with, but they are not required to set it out in technical detail, certainly, so far as the standard procedure is concerned. The danger is obvious that the kind of pernickety criticism of the form or content of the 'writing' exemplified here can result in an employee being barred from the judgment seat entirely, as occurred here. It is, of course, equally important from the point of view of the employer that an employer should know where it stands, and it is as well for employers to appreciate that there is no requirement for excessive technicality in relation to the form in which a grievance is set out in writing, so that they can easily appreciate when they must fulfil their obligations under the 2002 Act and the 2004 Regulations; otherwise they might find themselves down the slippery slope leading to an automatically unfair dismissal…"

24. Mr Solomon for the Appellants has made a number of criticisms of this decision, and we will return to deal with those shortly. Suffice it to say that we agree with Burton J that in identifying whether or not the complaint is identical to that which has been lodged before the Tribunals, one must not approach the issue in a technical way. The law in this area is directed at employees who in many cases - perhaps most – will have no knowledge at all of the relevant law. The aim is to promote the use of appropriate procedures. It would be quite wrong to require the grievance to be made in any unduly legalistic or technical manner. At the same time, it must not be forgotten that an employer who receives a grievance and is at fault in failing to take matters further is at risk of paying additional compensation if the claim ultimately succeeds. Indeed, if it succeeds he will have to pay additional compensation to the extent of at least 10 percent. But he cannot fairly be expected to take matters further if he is unaware that a relevant complaint has been lodged.

25. It seems to me that the objective of the statute can be fairly met if the employers, on a fair reading of the statement and having regard to the particular context in which it is made, can be expected to appreciate that the relevant complaint is being raised. I do not think this formulation is essentially different to that urged upon me by Mr Solomon for the Appellant, namely "how a reasonable employer, with the actual or constructive knowledge of the employer at the time he received the grievance, would have understood it", although I would prefer to avoid concepts of actual or constricted knowledge. Nor do I think that any of the earlier cases to which I have made reference are at all inconsistent with my approach."

19. That judgment contains the complete statement of the law on this matter although it is also useful to look at what Judge Peter Clark said in Mark Warner Ltd v Aspland [2006] IRLR 87 (cited by Elias P above) where he says this at paragraph 15:

"15. …As the earlier cases make clear, the question is whether the definition of grievance in Regulation 2(1) is met. Is there a complaint in writing made by the employee about action which his employer has taken or is contemplating taking in relation to him? In my judgment, in the present case, the correspondence relied on fulfils these requirements. The action complained of is the Respondent's alleged breach of the implied term of mutual trust and confidence and victimisation arising out of the Claimant's earlier protected act, that is, her previous Tribunal complaint."

Discussion and conclusion

20. I prefer the arguments of the Claimants and have decided that the appeal must be allowed. I agree with Mr Clark that the requirements for Step 1 are minimal. This document says it is a statutory grievance by the Claimants. The Respondent accepts that it is a Step 1 grievance, insofar as it applies to the Council. In para 1 of her grievance, the Claimant is complaining that she is not being paid the same as men doing the specified jobs of gardener and road sweeper rated the same as her job. Three gardeners are identified by initials, who were supplied by the Council in answer to a statutory questionnaire. She is clearly making a complaint under the Equal Pay Act 1970 s1(2)(b). She also adds "or equal value". As a matter of construction, and when read beside para 2 (below), this is less obviously a claim under s1(2)(c). Miss Criddle did not address any separate argument on it, but since the requirement is minimal, I hold that the Claimant here makes a complaint also under s1(2)(c), citing comparators by initial, job title and grade.
21. In para 2, the Claimant complains of being paid less for her work which is of equal value to that of men who were paid at Red Book rates prior to transfer to the Respondent. She is clearly making a complaint under s1(2)(c). She is entitled to argue that she is being a rate for men set by the Council, transferred to and maintained by the Respondent, which is less than the rate of men employed by their previous common employer.
22. Those are issues which would require some response from the Respondent, at a meeting envisaged by Step 3. It may be that the response would be, as Miss Criddle has intimated: "the comparators you named are not working for us. We have nothing to do with the Council and we pay the rate for the job". It may be that would be an end of it. If not, and particularly if new comparators are cited, the claim may be struck out for failing to be the same complaint as was made in the grievance. The claim, if otherwise compliant with the grievance regime, may be struck out or dismissed for being made against the Respondent more than six months after the transfer.
23. The Employment Judge, in my judgment, required too much of the Step 1 grievance. He criticised the grievance for not expressly relating to any action taken by the Respondent. With respect it does: it shows that the Claimant was being paid at a rate below that paid to identified men. Weekly payment of wages is action taken by the Respondent. The need to cross-refer to the statutory questionnaire should be seen in the context of the operation of TUPE, where things done by the Council are treated as done by the Respondent, which is certain to have been given the questionnaires. In particular, the reliance by the Employment Judge on the requirement that there be an "intention of action", or requiring action from Mr Dodd in response, is neither here nor there as Elias J expressly made clear in paragraph 22 of Canary Wharf, ...cited para 17 above). It is not necessary that the employee should indicate that she wants or expects the complaint to be dealt with and she does not expressly need to invoke a procedure. The action the employer is required to take is to arrange a meeting. So this is purely mechanistic: it provides for the first step in a three-step procedure of notification to the employer that a grievance exists. Although the document headed statutory grievance is directed to the Council, solicitors acting on behalf of these employees referred that complaint directly to the Respondent. Once it was read by Mr Dodd, the "wrong recipient" point disappears. I am not persuaded that a grievance directed to the Council cannot be a grievance when a copy of it is also sent to the Respondent. The fact that it refers to individuals who are not employees may be a good point but it does not mean that it loses its potency as a grievance. The requirements for Step 1 are minimal. The Claimant has a grievance, it was set out in a written statement, a copy of it was sent by email to "the employer" both the Council and the Respondent. In my judgment all requirements of Step 1 were met.
24. I am conscious of the powerful submission made by Miss Criddle about what the consequences of this would be. Failure to follow the grievance procedure could lead to the claims being struck out, as here. The Employment Judge felt fortified in doing so because it was open to the Claimants to present fresh proceedings - to issue a grievance, as Mr Clark tells me has been done, and to issue fresh proceedings, which has not yet been done; and so the ground can be made up. From the employer's point of view there is exposure to an uplift in any compensation which might be awarded, between 10 and 50 per cent but it might be zero in an exceptional case.
25. It is not for me to give a judgment about this, but I do point out the exceptional nature of this case, which is that Mr Dodd did not inherit, on the transfer of housing stock, comparators of the job description given by the Claimants or any of the named persons, and so he may have felt justified in thinking that this was not a grievance requiring him to set up a meeting. The complication of TUPE cannot be avoided, for difficulties facing the Claimants about the application of the Equal Pay Act and Article 141 of the Treaty following a relevant transfer have been explained in Powerhouse Retail Ltd & Ors v Burroughs & Ors [2006] IRLR 381 HL (reported as Preston). These are not matters for my decision today but they do indicate very exceptional circumstances.
26. The lesson of this case is as follows. For those who are engaged on behalf of women claimants seeking equal pay, especially on no-win-no-fee terms, careful attention to the basic requirements for a claim must be given before grievances are sent to employers and Tribunal proceedings presented. This case reached the Tribunal following a route which contained many errors and a failure to look at the detail. TUPE is cited with no understanding of its effect, or of cases decided under it. The statutory grievance is headed by the name of another employer not the Respondent to the claim, the grades of the comparators are inapt for the Respondent, the identified comparators never worked for the Respondent, and there are omissions from the pro forma: see for example "depending on my grade". The practical utility of the appeal has not been thought through. New grievances have been lodged, to be followed by new claims, which presumably correct these errors. Since Stefan Cross Solicitors are regular litigants in our jurisdiction it is appropriate to give this warning to this firm and to others that greater care should be given before legal proceedings are threatened and certainly before a grievance is put in. The appeal is allowed.

Postscript

27. The oral Judgment in this appeal was given at the hearing on 8 January 2008 and transcribed much later. On 10 January 2008, Lady Smith handed down her reserved Judgment following a hearing on 18 December 2007 in The Highland Council v TGWU and ors UKEATS/0020/07. Mr Clark and Miss Criddle appeared in both cases but did tell me Judgment was awaited. I was referred to the Judgment of HHJ Richardson in City of Bradford MDC v Pratt UKEAT/0391/06 with which Lady Smith subsequently disagreed (at para 11). As it turns out, it has not been necessary for me to express a view on the two points decided by Lady Smith in construction of the documents in her case viz. comparators in the grievance, and any added by amendment. The Respondent did not take the point that comparators had not been identified, but only that the grievance was addressed to the wrong recipient, and I was not asked to consider the match between the grievance and the claim, or any amendment to it. Practice Direction paras 9.1 and 9.17 require that where parties know that two pending appeals may raise similar points, they should inform the Registrar, and certainly the hearing judge, so that the cases may be handled expeditiously. That should have been done here.