United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR ANTONY WHITE (One of Her Majesty's Counsel) Instructed by: Messrs Thompsons Solicitors The St Nicholas Building St Nicholas Street NEWCASTLE-UPON-TYNE NE1 1TH
For the First Respondent	MR PHILIP ENGELMAN (of Counsel) Instructed by: Messrs Stefan Cross Solicitors Buddle House Buddle Road NEWCASTLE-UPON-TYNE Tyne & Wear NE4 8AW
For the Second Respondent	MR DAVID READE (One of Her Majesty's Counsel) Instructed by: Solicitor Sunderland City Council Legal Services P O Box 100 Civic Centre SUNDERLAND SR2 7DN

SUMMARY

Jurisdictional Points

Sex discrimination

Can an employment tribunal make a declaration that the term of a collective agreement is void, pursuant to section 77 of the Sex Discrimination Act, at the behest of a claimant who can bring proceedings under the Equal Pay Act for breach of the equality clause, where if the claim succeeds, it necessarily involves a finding that the term was unlawfully discriminatory? The EAT held that they can.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. This is an appeal against the decision of the employment judge who held, in the course of a case management hearing, that claims brought by employees that certain terms of a collective agreement were void under section 77 of the Sex Discrimination Act 1975 should be heard at the same time as their equal pay claims made under the Equal Pay Act.
2. The Appellants are two trade unions who are parties to the collective agreement concerned. The Respondents are the individual employee claimants and also their employer, Sunderland City Council. They seek to uphold the employment judge's decision. They join common cause on this matter but, I suspect, on little else.

The background to the proceedings.

3. Each of the claimants in these proceedings makes three separate complaints. First, they pursue claims under section 2 of the Equal Pay Act on the grounds that they were employed either on work rated as equivalent, or work of equal value, to their identified comparators and have been subject to less favourable contractual terms. This claim relates to two periods, the first relating to the period prior to 1 October 2005 and a separate claim with respect to the period after that date. I will refer to this as the equal pay claim.
4. The second claim is against the employer and the trade union together. This is the claim under section 77 of the Sex Discrimination Act, as extended by section 6 of the Sex Discrimination Act 1986. The contention is that certain provisions of the collective agreement, which took effect from 1 October 2005, should be declared void.
5. There is a third claim against the trade unions alone under section 12(3)(c) of the Sex Discrimination Act on the basis that by entering into or continuing the collective agreement, the unions have discriminated against the claimants on grounds of sex. That claim has been stayed pending the decision of the Court of Appeal in the case of Allen v GMB. This appeal is not directly concerned with that claim, although the Respondents contend that it is a potentially relevant fact in this appeal because it means that the unions are already parties to the proceedings.
6. It is pertinent to note the nature of the employer's defences to the first claim because it has a bearing on the Order made by the employment judge. With respect to the claim up to 1 October 2005, the employer denies that it is required to justify any difference in pay, and contends in the alternative that if it is required to justify such differences, they can be explained by genuine material factors other than sex within the meaning of section 1(3) of the Equal Pay Act, namely the application to the comparators of cost neutral bonus schemes arising out of productivity incentive schemes.
7. In relation to the period after 1 October 2005, the employer relies on the provisions of the Phase One Single Status Agreement (POSSA) to provide a genuine material factor defence under section 1(3) of the Equal Pay Act 1970.
8. The unions have no interest in the claims made with respect to the period prior to 1 October 2005, but they do have a direct interest in the claims with respect to the period after that date because the outcome of that claim will affect the ability of the unions and employers to give effect to the POSSA agreement.
9. The section 77 claim was made by an amendment to the original claim in August 2007. At that stage the employment judge considered that the section 77 claim could not be heard at the same time as the genuine material factor claims raised by the employer (i.e. claim two should not be heard together with claim one) because the hearing was anticipated to take place in January, and he thought there was not enough time for the unions to prepare their case.
10. However, at a later hearing on 5 October on the basis that the substantive matter would not now take place in January he considered that it was appropriate for the two claims to be heard together. He summarised his reasons at follows:-

"(a) upon further reflection, I accept the submissions of Mr Sweeney and indeed Mr Engelman that it will be impracticable if not impossible to consider the evidence as to the first respondent's genuine material factor defence in isolation from any consideration of the claimants' application under section 77 of the Sex Discrimination Act 1975;

(b) however, for the reasons expressed in relation to my order dated 9 August 2007 – some two further months having elapsed and the claimants and the first respondent being unable to put before me any matter which would make me consider otherwise – I remain of the view that the second and third respondents would not be ready for such a hearing by early January 2008 so that the Hearing presently listed on 7 January to 1 February 2008 cannot proceed on this basis;

(c) I also remain concerned that, if the section 77 application and the genuine material factor defences are to be heard at the same Hearing, the second and third respondents may be put to some additional expense in relation to matters in which they are not involved;

(d) nevertheless, there has already been very significant delay in relation to the determination of the cases and in particular the genuine material factor defences and I do not consider acceptable any proposition that the section 77 applications are determined first with the remaining issues being considered some time thereafter;

(e) accordingly, in my judgment these issues should be considered at the same Hearing which should be relisted;"

11. When giving his reasons, the employment judge also indicated that attempts would be made to timetable the hearing so that the unions would not have to be present throughout the whole of the substantive hearing on the genuine material factor defences – which were anticipated to take about thirty days – and that the timetable should be structured so as to be able to identify the days when they may need to be involved in the section 77 claim.
12. The unions submit that the employment judge was wrong to order the first and second claims to be heard together. Initially the appeal was based upon the grounds that the decision had involved an improper exercise of the employment judge's case management powers.
13. However, Mr White QC, counsel for the unions, accepted that subject to the argument that he now wishes to advance, the employment judge was in principle entitled to conclude that the matters should be heard together, and that the ruling was not perverse. Mr White indicated that there was a potential argument based on the fact that the employment judge may not have taken account of a relevant consideration, but he did not seek to pursue it. Effectively he conceded there is not much weight in that point and that the appeal should really stand or fall on the ground he now wishes to advance.
14. That ground is based on an amendment which was made to the original Notice of Appeal. Mr White advances a legal argument which was not run before the employment judge below but which all counsel accept I should now determine. It is not that there was an improper exercise of discretion in allowing the two claims to be heard together; rather it is that there was no power for the Tribunal to hear the section 77 claim at all where the claimants are able to advance their equal pay claims under the Equal Pay Act.
15. Mr White concedes that this is a technical argument. It rests on the premise that if one analyses carefully the relevant legislation, particularly tracing the development of the relevant statutory provisions relating to discriminatory collective agreements, an employment tribunal has no power to issue declarations in favour of these claimants for acts which may contravene section 77. If that is right then the employment judge could not properly have ordered the two claims to be heard together for the simple reason that he had no power to hear the second claim at all.

The development of the legislation.

16. In order to understand the argument it is necessary to set out the relevant history of this legislation.
17. Sections 1 and 2 of the Equal Pay Act provide for equal pay claims to be brought by persons employed on like work, work rated as equivalent, work of equal value, to their chosen comparators. Such claims operate as claims for contravention of a term modified or included by virtue of an equality clause (section 2(1)). The terms which are modified or included by the equality clause are identified in section 1(2) of the Act. Effectively, any term which is less favourable than that of the chosen comparator will be modified so as not to be less favourable; and if there is a term in the man's contract which is not in the woman's contract, then the woman's contract will be deemed to include that term.
18. There is a defence, however, to an employer who is treating women less favourably than the chosen comparator. If he can show that there is a genuine material factor other than sex which justifies the difference in pay then he will not be acting unlawfully: see section 1(3) of the 1970 Act.
19. In many cases the terms in the contracts of the claimant and the chosen comparator may be incorporated in the contract of employment from collective agreements entered into between the employer and the relevant trade unions. In the 1970 Act as originally enacted there was a provision in section 3 allowing the Central Arbitration Committee to make amendments to discriminatory collective agreements. That section was given a highly restrictive interpretation by the Divisional Court in R v Central Arbitration Committee ex-parte Hy-Mac Ltd [1979] IRLR 461. It was repealed by the Sex Discrimination Act 1986.
20. The Sex Discrimination Act 1975 entitles a woman to complain about treatment by her employer where the discrimination is related to matters which are not regulated by the terms and conditions of her employment. Accordingly, any discrimination derived from a collective agreement relating to non-contractual terms and conditions will be regulated by the Sex Discrimination Act.
21. The Sex Discrimination Act made specific provision for sex discriminatory contracts, allowing their terms to be challenged quite independently of any specific discriminatory treatment. Section 77 provides as follows:

"(1) A term of a contract is void where –

(a) its inclusion renders the making of the contract unlawful by virtue of this Act; or

(b) it is included in furtherance of an act rendered unlawful by this Act; or

(c) it provides for the doing of an act which would be rendered unlawful by this Act.

(2) Sub-section (1) does not apply to a term the inclusion of which constitutes, or is in furtherance of, or provides for, unlawful discrimination against a party to the contract, but the term shall be unenforceable against that party.

…

(5) On the application of any person interested in a contract to which sub-section (2) applies, a County Court or Sheriff Court may make such order as it thinks just for removing or modifying any term made unenforceable by that sub-section; but such an order shall not be made unless all persons affected have been given notice of the application (except where under rules of court notice may be dispensed with) and have been afforded an opportunity to make representations to the Court."

22. It is to be noted that subsections (1) and (2) cover different situations. Where the term has the effect that unlawful discrimination is or may occur against a party to the agreement, sub-section (2) applies. The term is unenforceable and "any person interested in a contract" may apply to a county court or Sheriff court under subsection (5) for an order removing or modifying the unenforceable term. By contrast, there is no specific remedy provided at all where the term constitutes or enables unlawful discrimination against someone other than a party to the agreement. That is the situation where the terms of a collective agreement provide for or permit discrimination against employees. The relevant term then falls within the scope of sub-section (1) and is void but there is no indication in the legislation itself as to who if anyone, can challenge that term and obtain a declaration to that effect.
23. Mr White, in the course of argument, submitted that an interested party may apply to the High Court for a declaration under rule 40.20 of the Civil Procedure Rules. That permits the High Court to grant a declaration, as a discretionary remedy, whether or not any other remedy is claimed. However, there is a dispute about whether that remedy can be pursued; the Respondents say that section 62 of the 1975 Act ousts the jurisdiction of the High Court to grant such a remedy. I consider that issue further below.
24. Section 77 does not in terms apply to collective agreements. It may exceptionally be the case that some collective agreements are contracts and fall within the scope of that definition. Even where they are, however, there is a statutory presumption that collective agreements are not intended to be legally enforceable (see section 179(1) of the Trade Union and Labour Relations Act 1992.) The assumption appears to have been (perhaps mistakenly) that such agreements, since they were not binding contracts, would not entitle anyone to invoke section 77 with respect to them.
25. That was the assumption made by all the parties before the European Court of Justice in the case of the Commission of the European Communities v United Kingdom [1984] ICR 192. In that case the Commission contended that the provisions of the Sex Discrimination Act were in breach of the Equal Treatment Directive in various ways. One of the alleged shortcomings was that there was no legislation by which provisions rendered contrary to the principle of equal treatment in, inter alia, collective agreements could either be declared void or amended. That Directive requires under Article 3(2)(b):

"any provisions contrary to the principle of equal treatment which were included in collective agreements, individual contracts of employment, internal rules of undertakings, or in rules governing the independent occupations and professions, shall be or may be declared null or void or may be amended."

There is a similar provision in the Equal Pay Directive (see Article 4).

26. The UK government submitted that there was no infringement of that principle because there were no legally enforceable collective agreements and therefore it would be fruitless to declare such non-legal terms void or to amend them. The ECJ disagreed for the following reasons (para 11):

"The Directive thus covers all collective agreements without distinction as to the nature of the legal effect which they do or do not produce. The reason for that generality lies in the fact that, even if they are not legally binding as between the parties who sign them or with regard to the employment relationships which they govern, collective agreements nevertheless have important de facto consequences for the employment relationships to which they refer, particularly insofar as they determine the rights of workers and, in the interests of industrial harmony, give undertakings some indication of the conditions which employment relationships must satisfy or need not satisfy. The need to ensure that the Directive is completely effective therefore requires that any clauses in such agreements which are incompatible with the obligations imposed by the Directive upon the Member States may be rendered inoperative, eliminated or amended by appropriate means."

In other words, although discriminatory collective agreements are not enforceable, workers may not appreciate that and the ability formally to render them inoperative, or to amend them, is one of the objectives of the Directive.

27. The UK government further submitted (inconsistently with its first submission) that provisions contrary to the principle of non-discrimination would in any event be rendered void by section 77. That would appear to suggest that it was not necessary to adopt a procedure which would entitle a party to obtain a formal declaration to that effect.
28. It is not entirely clear whether the Court accepted that submission. It did say that:

"it may be admitted that the United Kingdom legislation satisfies the obligations imposed by the directive as regards any collective agreements which have legally binding effects in so far as they are covered by section 77 of the Act of 1975",

but whether they assumed that an individual claimant could already obtain a declaration to that effect is not clear. It is difficult to see how a mere declaration in the statute can be enough to comply with the Directive because it fails to resolve a dispute where the parties disagree whether the term in the collective agreement is unlawful or not. Since the purpose of amending or invalidating the agreement is to enable individuals to know what their rights are, in my judgment it must be necessary to provide a remedy to establish that a term is indeed void under section 77.

29. In response to this ruling, and in particular the apparent lack of any power to deal with non legally binding agreements, the United Kingdom Government enacted section 6 of the Sex Discrimination Act 1986. As originally enacted it provided as follows, insofar as is material:

"(1) Without prejudice to the generality of Section 77 of the 1975 Act (which makes provision with respect to the validity and revision of contracts), that section shall apply, as it applies in relation to the term of a contract, to the following, namely –

any term of a collective agreement, including an agreement which was not intended, or is presumed not to have been intended, to be a legally enforceable contract;

…

…

and that section shall so apply whether the agreement was entered into, or the rule made, before or after the coming into force of this section."

30. The effect of this provision was simply to equate all collective agreements with contracts, whether they were intended to be legally enforceable or not. Therefore, it still left the absence of any specific remedy to establish whether a term should be treated as void under section 77(1).
31. Another limitation in section 77 which was put right by the 1986 Act was that it only applied where the act which the term provided for was unlawful under the 1975 Act. As I have indicated, that would not apply to cases where there were less favourable terms or conditions of employment because they would fall under the Equal Pay Act rather than the 1975 Act. Section 3 provided some limited correction of such collective terms, but it was of limited utility. Discriminatory terms rendered unlawful under the Equal Pay Act but falling outside the scope of section 3 escaped the clutches of the law altogether.
32. This consequence was avoided by the provisions of sections 6(3) and (4) of the 1986 Act which deem acts which constitute the inclusion of discriminatory terms into contracts of employment to be acts which will be rendered unlawful under the 1975 Act. The specific provisions are as follows:

"(3) For the purposes of the said Section 77 a term or rule shall be deemed to provide for the doing of an act which would be rendered unlawful by the 1975 Act if –

(a) it provides for the inclusion in any contract of employment of any term which by virtue of an equality clause would fall either to be modified or to be supplemented by an additional term; and

(b) that clause would not be prevented from operating in relation to that contract by Section 1(3) of the Equal Pay Act 1970 (material factors justifying discrimination).

(4) Nothing in the said Section 77 shall affect the operation of any term or rule insofar as it provides for the doing of a particular act in circumstances where the doing of that act would not be, or be deemed by virtue of sub-section (3) above to be, rendered unlawful by the 1975 Act."

33. The final piece of the legislative jigsaw is provided by section 93 of the Trade Union Relations and Employment Rights Act 1993. This dealt with the problem of who is able to bring proceedings to challenge the terms of a collective agreement. As I have indicated, there was no specific remedy provided by section 77 itself for third parties to challenge terms in a contract or collective agreements. The 1993 Act expressly provides for a legal challenge, but only in limited circumstances. It inserted new sections 6(4A) and 6(4B) into the 1986 Act as follows:

"[(4A) A person to whom this subsection applies may present a complaint to an [employment tribunal] that a term or rule is void by virtue of subsection (1) of the said section 77 if he has reason to believe –

that the term or rule may at some future time have effect in relation to him, and

where he alleges that it is void by virtue of paragraph (c) of that subsection, that –

an act for the doing of which it provides may at some such time be done in relation to him, and

the act would be, or be deemed by virtue of subsection (3) above to be, rendered unlawful by the 1975 Act if done in relation to him in present circumstances.

(4B) In the case of a complaint about –

a term of a collective agreement made by or on behalf of –

an employer,

an organisation of employers of which an employer is a member, or

an association of such organisations of one of which an employer is a member, or

a rule made by an employer,

subsection (4A) applies to any person who is, or is genuinely and actively seeking to become, one of his employees."

34. The remedy is limited. Existing employees can obtain a declaration only if the relevant term "may at some future time" have effect in relation to them. Mr White's argument is that this formulation excludes, amongst others, those who are already affected and have potential equal pay claims which they can pursue to remedy their grievance. The other category of potential claimants who can pursue section 77 remedies are those who genuinely and actively seek employment, who will not at that stage have equal pay claims.
35. Mr White submits that the assumption underlying these provisions appears to have been that at least for those employees who have claims under the Equal Pay Act with respect to contractual terms and conditions, there is no need for any additional right to have terms rendered void for infringing section 77 and none has been provided. The issue I have to decide is whether such employees do have that right.
36. In the course of argument I was shown various statements in Parliament which Mr White submitted I could consider under the Pepper v Hart principle. He relied on them to support his argument. I am not satisfied that they do support it. They are consistent with his contention that the Government considered that there was no need to provide those with existing claims an additional right to take an action under section 77. However, it is not clear to me from these statements whether that was because the view was taken that the right already existed within the body of the discrimination legislation or whether it was that it was simply superfluous to grant that right at all. Furthermore, whatever Parliament's intention, that would not in any event defeat a claim that tribunals should have the power to grant a declaration to these claimants under EU law, provided that the legislation can be read so as to give effect to that principle.

The scope of the argument.

37. It is important to identify precisely what is in issue in this case. The disagreement between the parties falls within a very narrow compass indeed.
38. Mr White concedes the following points:

(1) If the genuine material factor defence derived from the collective agreement succeeds, then inevitably the Tribunal will have to have made a ruling that certain terms of the collective agreement operate in a discriminatory way and cannot be relied upon by the employer. In other words, it will be necessary in the course of determining the equal pay claims with respect to the period post 1 October 2005 to decide whether the term of the collective agreement is valid or not.

(2) The claimants could obtain a declaration in the High Court that the term is void.

(3) Any decision made by the Tribunal would give rise to an issue estoppel and would in principle be capable of binding the trade union. Indeed, if they had been given the opportunity to make submissions on the issue and had chosen not to do so then almost inevitably issue estoppel would run.

(4) Even absent any jurisdiction for the Tribunal formally to determine the section 77 claim with respect to the terms of a collective agreement, the union would be an interested party in the equal pay claim precisely because they would be affected by a finding that the agreement was unlawful and have an interest in the proceedings. Accordingly, in those circumstances they could apply to be joined in the action and to make representations pursuant to rule 10 (2)(r) of the Employment Tribunal rules..

(5) Furthermore, the employment judge has a discretion under the same rule to join the union as a respondent even against its will, although Mr White submitted this would be unlikely.

39. The only issue, therefore, is whether, having made a decision in the course of its determination that the term of the collective agreement cannot be relied upon as a section 1(3) defence to an equal pay claim because it operates in a discriminatory way, the court can make a formal declaration to that effect. Mr White says no. He contends that the structure of the legislation is clear, and that the rights conferred by TURERA 1993 on certain persons to take proceedings to obtain the declaration under section 77 are deliberately intended to exclude claimants like those in this case who have equal pay claims. Moreover, it is trite law that employment tribunals are creatures of statute and have no power to grant any remedies save for those which Parliament has provided: see Staffordshire County Council v Barber [1996] ICR 379(CA).
40. Mr Reade QC and Mr Engleman, counsel for the Council and the claimants respectively, submit for a number of reasons, that this analysis is flawed. Since they supported each other's arguments, save in one respect which I outline below, I will deal with their submissions together:

(1) They submitted that since the unions were already properly before the Tribunal in the section 12 claim, there was no difficulty in the Tribunal making a declaration that a term conflicted with section 77.

(2) In any event, an order declaring the rights of the parties "in relation to the act to which the complaint relates" could be given by section 65 of the Sex Discrimination Act. This provides as follows:

"(1) Where an [employment tribunal] finds that a complaint presented to it under section 62 is well-founded the tribunal shall make such of the following as it considers just and equitable

(a) an order declaring the rights of the complainant and the respondent in relation to the act to which the complaint relates;

(b) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or by a sheriff court to pay to the complainant if the complaint had fallen to be dealt with under section 66;

(c) a recommendation that the respondent take within a specified period action appearing to the tribunal to be practicable for the purpose of obviating or reducing the adverse effect on the complainant of any act of discrimination to which the complaint relates.

[(1A) In applying section 66 for the purposes of subsection (1)(b), no account shall be taken of subsection (3) of that section."

It is submitted that the declaration to the effect that a term of the collective agreement is void could properly fall within that language.

(3) The Equal Pay and the Equal Treatment Directives in terms require that there must be an effective remedy to deal with terms of the collective agreement which infringe either of those directives. Even if the claimants could after successfully winning in the tribunal, go to the High Court formally to obtain the declaration (which they dispute), that would not be an effective remedy because it would compel the claimants to incur unnecessary cost. It would be a real disincentive to obtaining that relief.

(4) Mr Engleman submits (but this is where his argument departs from that of Mr Reade) that section 6(4)(A) is perfectly capable of being interpreted so as to confer rights on persons who can pursue equal pay claims. The direct effect of the equal pay claim is correcting the terms of their contracts rather than the collective agreements, but the terms of the latter will apply both currently and in the future and in that context there is no reason why, as a matter of language, a claimant cannot both seek the modification of his or her contract as well as the modification of the collective agreement. They ought not to be seen as mutually exclusive remedies.

Discussion.

41. I have found this in many ways an extremely artificial debate. It is common ground that a tribunal can make a determination which will operate to bind the collective parties and whose effect will be to prevent them from relying in future on the terms of the collective agreement. The only issue is whether a formal declaration to that effect can be made.
42. The reason why the unions are resistant to this is that they do not wish to be joined formally as a party to the proceedings. Such formal joinder of the unions is the automatic consequence of Rule 52 of the Employment Tribunal Rules of Procedure whenever a claim is made under section 6(4A) of the Sex Discrimination Act 1986. They recognise that in some cases it may be in their interests to make representations, and Mr White also accepts that even where they are named as respondents they could choose simply to take a neutral stance and not make any representations about the issue to the court. In effect, they could leave the claimants and the employer to argue the point and merely accept whatever conclusion the tribunal were to reach. That would be unlikely to put them at risk of costs.
43. Nonetheless, Mr White submits there are real presentational issues involved here. There is a difference between on the one hand the union choosing to become an interested party and to fight its corner, and on the other the union being automatically joined as a party, against its will, which places it in a position where it has to decide whether or not to make submissions on the validity of the term. The latter is a less attractive option to the unions, even although the end result is very similar.
44. In my judgment, the Tribunal would have the power to make a declaration, although I accept many of Mr White's arguments. I accept that it does not do so by virtue of section 65 of the Sex Discrimination Act: I do not see how a declaration that terms of a collective agreement are void can properly be described as "a declaration of the rights of the claimant and the respondent in relation to the act to which the complaint relates." Nor can there be a power to make the declaration merely because the union happens to be before the court as a result of the section 12 proceedings. That fact cannot affect the jurisdiction of the tribunal to make a declaration of this kind.
45. I also reject Mr Engelman's submission that section 6(4)(A) would as a matter of ordinary construction be considered to enable these claimants to make these declarations. In my judgment Mr White is correct in saying that the assumption underlying the section is that only those who have not got existing Equal Pay Act claims (or Sex Discrimination Act claims, where those apply) can take advantage of this section. Once the employee has the equality clause to remedy any discriminatory terms, it cannot be said that the employee may in the future be affected by the collective agreement; he or she is secure from its effects.
46. I also consider that even with regard to clauses 9 and 10, which are not incorporated into the contracts of employment, the claimants would have a sex discrimination claim if these clauses discriminated against them on grounds of sex since the denial of this potential benefit to them, even if it is not part of their contracts, would constitute a detriment to them, and that is sufficient to enable them to pursue the claim: see Meade-Hill and National Union of Civil and Public Servants v British Council [1995] IRLR 478.
47. However, I am persuaded that whatever the natural construction of these provisions would be, the obligations imposed by EU law require that these claimants are able to obtain a declaration that the terms are void.
48. There are two issues that have to be considered with respect to this potential lacuna in the remedies available. They arise from the fact that the UK is under an obligation to give effect to the Equal Pay and Equal Treatment Directives, including their obligations with effect to collective agreements. There are two fundamental principles of EU law which regulate how that must be achieved.
49. First, it is established that domestic law must provide an effective remedy to deal with a breach of any EU rights. Second, there is a related principle of equivalence which provides that the remedy made available in the domestic courts for EU rights must be no less favourable than those afforded to similar claims of a purely domestic nature.
50. The principle of effectiveness has been a settled rule of Community law since Rewe [1976] ECR 1989. The ECJ formulated the two principles in Preston and Others v Wolverhampton Healthcare NHS Trust & Others [2000] IRLR 506 at para 31 in the following way:

"First, it should be borne in mind that according to settled case law, in the absence of relevant Community rules, it is for the national legal order of each Member State to designate the competent court and to lay down the procedural rules for proceedings designed to ensure that protection of the rights which individuals acquire through the direct effect of Community law, provided that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and are not framed in such a way as to render impossible in practice the exercise of rights conferred by Community law (principle of effectiveness)."

51. Whether the principle of effectiveness has been breached in any particular case depends upon a range of circumstances. In van Schijndel and van Veen v Stichting Pensioenfonds

Voor Fysiotherapeuten [1995] ECR 1-4705 the ECJ said this at para 19:

"…each case which raises the question whether a national procedural provision renders application of Community Law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances."

This stresses the need to look at the question broadly.

Is there any sanction at all?

52. The first issue to determine is whether there is any sanction at all for these claimants to challenge the terms of the collective agreement. Mr White submits that there is an action for declaration that can be taken in the High Court. However, that appears to be inconsistent with

section 62 (1) of the Act which provides:

"Except as provided by this Act, no proceedings, whether civil or criminal shall lie against any person in respect of an act by reason that the act is unlawful by virtue of a provision of this Act."

53. On the face of it, that appears to be broad enough to exclude any other proceeding. There is an exception in sub-section 2 for the making of an Order for certiorari, mandamus or prohibition. That permits judicial review proceedings to be initiated, but an ordinary civil action for a declaration would not fall within the terms of that exception.
54. Mr White submits that the section does not have that effect. He relies upon the decision of the House of Lords in Ealing London Borough Council v Race Relations Board [1972] AC 342 in which their Lordships held that section 19(10) of the Race Relations Act 1968, which contained words in some respects similar to section 62, did not exclude the jurisdiction of the High Court to grant a declaration.
55. However, the crucial feature of that section was that it only barred proceedings, other than those taken under the Act, in relation to acts which were unlawful by virtue of the provision of Part I of that Act. The declaration being sought by the Council did not fall into Part I and therefore the provision was inapplicable. Accordingly, it was plain as a matter of construction that the section did not apply. I recognise that there need to be clear words to exclude the jurisdiction of the High Court, but in my judgment that is the effect of the very broad and unambiguous words of section 62.
56. Accordingly, I do not accept that the claimants in this case could go to the High Court to secure the declaration that the term was void by virtue of section 77, even if they wished to do so. In my judgment, it necessarily follows that the principle of effectiveness is denied. There simply is no sanction which is available to these claimants to have the term of the collective agreement declared void. The mere statutory statement to that effect does not, as I have said, resolve the conflict as to whether in any particular case a term is void or not.
57. Mr White submits that in effect these claimants achieve much the same result as a consequence of taking their equal pay claims. They are able to establish that the terms of their contracts are unenforceable and must be amended so as to incorporate the equality clause.
58. That is so, but in my judgment that is no answer to these claims. The right conferred by the two Directives is to have an effective remedy to have the terms of the collective agreement declared void. On Mr White's argument there is a lacuna because employees with a potential equal pay claim will not be able to take that step. The fact that, as a matter of practice, they may not be concerned whether they can secure a formal declaration of that kind or not is immaterial. The issue is whether, if they wish to pursue a remedy to give effect to the rights conferred by EU law, it is an effective one.
59. In my judgment the employment tribunal must have jurisdiction to grant the necessary declarations in order for there to be an effective remedy. It is the employment tribunal which is seized of the equal pay issue which is inextricably linked with the section 77 action. In Marshall v Southampton & South West Hampshire Area Health Authority (No 2) [1993] IRLR 445 the ECJ held that the Sex Discrimination legislation then in force was incompatible with EU law because it denied the claimant a right of interest and also set a cap to the amount of compensation that could be recovered.
60. Those rules had to be disapplied in order to give effect to EU law. Thereafter, it was the tribunals who had the jurisdiction to hear the sex discrimination complaints who had to apply the EU principles. Moreover, it is not as if there is some principled objection to the Tribunals giving declarations of this kind, for they may already do so where an employee or prospective employee can bring himself or herself within the scope of section 6(4A) of the 1986 Act.
61. I should add that even if I am wrong and the claimants have a remedy in the High Court to obtain a declaration under section 77, it would still not in my view satisfy either the principle of effectiveness or equivalence. There would not then be a total denial of the right but in my view it would still be excessively difficult to pursue the right.
62. Whilst the ECJ will give a certain degree of respect for the autonomy of States to determine their own procedural rules, it would put a serious bar in the way of the effective enforcement of this right if the claimant, having succeeded in the equal pay claim before the tribunal, then had to incur the additional cost of suing in the High Court in order to obtain the declaratory relief where the factual substratum of both claims is exactly the same.
63. In practice, as Mr White fairly observed in argument, employees will not pursue such claims. He realistically recognised that in reality it is too unimportant a remedy for them to be troubled with that extra cost, given that by definition they will have succeeded in their equal pay claims.
64. I agree with the analysis, but it seems to me to be a point strongly against his argument. Whilst it may be true to say that the right conferred by these Directives to have the collective agreements challenged in this way is a relatively unimportant one, at least for employees with equal pay claims, the fact that claimants will be strongly discouraged from taking a separate and independent claim in the High Court following a successful tribunal claim demonstrates that this is rendering the remedy ineffective in practice.
65. Finally I consider in any event that a requirement to make good the claim in the High Court would infringe the principle of equivalence. I was referred by Mr Reade to the recent opinion of Advocate General Kokott in the case of Impact v AMFF C268/06, in which she had to deal with a very similar situation under Irish law.
66. The facts briefly were these. The EU Directive on fixed term workers was not implemented by the date it ought to have been. For periods prior to implementation, claimants had to rely on rights derived directly from the Directive. For later periods they could rely on the domestic legislation which transposed those Directives into Irish law. The latter could be enforced in the Irish Labour Courts and before the Rights Commissioner but the EU right could only be enforced in the High Court.
67. The Advocate General considered that to have to pursue two parallel sets of proceedings in order to get the full protection conferred by EU law would inevitably breach the principle of effectiveness. Furthermore, she held that it would also infringe the equivalence principle since the domestic law which transposed the Directive into Irish law was capable of being enforced by a procedure which was far cheaper and more informal than the cost of proceedings before the High Court.
68. I, of course, recognise that the Advocate General's opinion is not binding on me and may not be adopted by the ECJ but I would respectfully adopt the analysis. In my judgment there is precisely the same situation here on the assumption that the only remedy is in the High Court. The purely domestic claims can be pursued in the Tribunals. That is precisely what employees who do not have equal pay or sex discrimination claims can do when they seek declarations under section 77.
69. On this analysis it is only the remedy which flows from the EU obligation to give an effective remedy which faces the more burdensome, formal and expensive procedure of a High Court action. In my judgment it is plain that the rights flowing from EU law are being treated less favourably and that is what the principle of equivalence forbids.
70. In order to give effect to these principles, however, it must be possible to construe the domestic legislation in a manner compatible with EU law. However, recent authorities have emphasised how broad that construction can be: see Ghaidan v Godin-Mendoza [2004] 2 AC 557 and R (on the application of IDT Card Services Ireland Ltd) v Customs and Excise Commissioners [2006] EWCA Civ 29. Mr Reade submits that it is possible to give a meaning to section 65 which would allow a declaration to be made in these circumstances.
71. Personally I prefer to read section 6(4A) of the 1986 Act so as to permit employees who have current claims nonetheless to seek a section 77 declaration. It can be said that the fact that they are currently affected does not logically prevent them being affected in the future also. Alternatively, I would simply omit the word "at some future time" in section 6(4A)(a) and the words "at some such time" in (b). In my judgment such omissions would not go against the grain of the legislation.

Disposal.

72. It follows that in my judgment employment tribunals have jurisdiction to grant declarations under section 77 of the Sex Discrimination Act to have terms of a collective agreement declared void, even to claimants who otherwise can test those term in the context of personal equal pay or sex discrimination claims. Accordingly, I dismiss the appeal.