United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR PAUL DRAYCOTT (of Counsel) Instructed by: Messrs Russell Jones & Walker Solicitors 1st Floor, St James House 7 Charlotte Street Manchester Lancashire M1 4DZ
For the Respondent	MR STEFAN BROCHWICZ-LEWINSKI (of Counsel) Instructed by: Messrs Mace & Jones Solicitors 61-67 King Street Manchester Lancashire M2 4PD


 


SUMMARY

EQUAL PAY ACT: Part time pensions

PRACTICE AND PROCEDURE: Amendment

The Employment Judge erred in her assessment that the Claimant's amendment to contend that it was not necessary for her to show that she would have joined the pension scheme when eligible (the opters' defence), had no reasonable prospect of success. Discrimination claims should be given a full trial absent a clear defence.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is about the exercise of discretion by an Employment Judge in refusing to allow an amendment to a claim. I will refer to the parties as the Claimants and the Respondent. It is a claim which is of long standing and has been before me on a number of occasions, both at oral hearings and on the papers. I need not describe the situation any further than to say that the Claimants are part time workers seeking the advantage of the rulings in the Preston v Wolverhampton NHS Trust (No 3) [2004] ICR 993 EAT sequence of judgments and rely upon Article 141 of the EU Treaty. The Claimants seek equal access to the Respondent's pension scheme.
2. The short point arises out of what is known as the opters' defence. This is a reference to a category of Claimants described by Regional Employment Judge Macmillan in his original judgment in the Preston cases. It describes those people who were not eligible to join a pension scheme, but who, upon becoming eligible, decided not to do so, or delayed doing so. In other words they opted not to join. The issue is whether they have the equality clause under the insertion into the Equal Pay Act of the right of equal access to pension schemes provided by the Occupational Pension Schemes (Equal Treatment) Regulations 1995, Regulation 10 of which inserts into Section 2 of the Equal Pay Act the following:

"(6D) Where a court or employment tribunal finds that there has been a breach of an equality clause which relates to the terms on which persons become members of the scheme (including any terms concerning the age or length of service needed for becoming a member of the scheme), the court or tribunal may declare that a woman has a right to be admitted to the scheme with effect from such date as it may specify provided that, in any case, that date is not earlier than 8^th April 1976."

3. This litigation has been hard-fought at every stage and has occupied the attention of procedural judges at the Employment Tribunal and on appeal. The present appeal relates to a change of approach by the Claimants. It is an assumption that the Claimants who were eligible to join the pension scheme, non-compulsory for full timers, did not do so and so are not eligible, either because as of right they are not entitled to the equality clause, or they are entitled to no remedy, since they have suffered no wrong.
4. That reflection came very late in the day, it has to be said, under what has been described by Employment Judge who gave the Judgment under appeal as an ingenious approach. This is attributed to Mr Paul Draycott of Counsel, who appears on behalf of the Claimants. His argument has been attacked by Mr Brochwicz-Lewinski indicating in measured terms that the application for leave to amend was correctly dismissed as having no prospect of success.
5. I bear in mind that I am dealing with the exercise of discretion and an approach on appeal to the handling of case management is one which is clearly set out in Selkent Bus Company Ltd v Moore [1996] IRLR 661 EAT, paragraph 36. The judge in a very careful judgment took account of obvious arguments to be raised which were raised and fully deployed on behalf of the Respondent: delay, cost, inconvenience and so on. None of those was upheld by the judge. The sole basis upon which the application was refused was that it had no reasonable prospect of success.
6. The legal proposition sought to be advanced by an amendment is to bypass the opters' defence to say that it is not a requirement of a claim under the Equal Pay Act, and/or the Article 141 that the Claimant show actual detriment. It is sufficient that there is an inequality as compared with males and that a subjective analysis of what she did, or would have done at any relevant time, is not appropriate and necessary. The issue for the judge was whether or not the amendment should be allowed.
7. The other approach I adopt is that as Lord Steyn said in Anyanwu v South Bank Students' Union [2001] UKHL 14 discrimination claims cry out to be tried on the merits and not disposed of as preliminary points without findings of fact. This is a discrimination claim and I would be slow myself to determine issues unless there were a clear point of law which would make it disproportionate for there to be a trial.
8. I note in a submission made by Mr Draycott, relying on Esso Petroleum Co Ltd v Milton [1997] 2 All ER 593 that it is, in certain circumstances, apt for hard-edged questions of law to be determined at a preliminary stage, either at a strike-out or, what I regard as equivalent here, the refusal to allow an amendment, so as to reshape the case without adding any new cause of complaint. See, for example, the judgment of Simon Brown LJ at page 599 where the court grasped the duty of deciding the specific issues.
9. The submissions of both Counsel to this issue have been informed by the judgment I gave in Preston (No 3) in test cases. The relevant passages relate to appeal issue 3, see [2004] ICR 993 at paragraph 10.3, and my discussion of that issue which appears at paragraph 30 onwards. The point was this: is there a breach of the 1970 Act where scheme membership is compulsory for full time staff but part-time staff are excluded? I took the view that since there was no specific issue on appeal against the Employment Judge's finding, in relation to the opters' defence, I should not make comment upon it but I did examine the argument based on the Bilka-Kaufhaus [1987] ICR 110 ECJ series of cases. I set out the four European Court cases, in all of which there appears to have been an element of compulsion to join the scheme and an actual exclusion of the individual Claimants.
10. I took the view that the impact of these cases was an Employment Judge in a national court was not required to weigh the relative burden and benefit to any given employee of any particular term. It seemed to me that the right existed to bring a claim, even if the claimant could not bring herself within a category of persons directly affected. It was at least arguable that she did not need to do that but, as I say, that issue was not finally decided since I accepted the arguments that it was not necessary. Nevertheless the opters' defence has had a significant degree of sustainability. See, for example, the judgment of Elias P in Dennison v The University College of St Mark and St John & Others [2006] UKEAT 01/9606 and, in respect of remedy, its application in Laverty v Lanarkshire Health Board [2008] UKEATS/0033/08, a judgment of Lady Smith. I myself have adopted it without serious argument in a strike-out case, Pepper v Lancashire County Council [2007] UKEAT/0404/07.
11. Mr Draycott advances three simple issues in this appeal: (1) What does the claimant need to show in order to establish breach of Article 141? (2) If the claimant establishes such a breach, what is her remedy, and (3) What European Union measure is applicable? In particular is it the amended Equal Treatment directive?
12. The last issue is one which is easy to determine. The Employment Judge gave her tentative conclusion that she needed fuller arguments on what she described as the principle of retrospectivity. That is whether the definition to be used appears in the 2005 amended directive, or an earlier version. The importance for Mr Draycott's argument is that Article 2.2 now provides as follows:

"For the purposes of this directive the following definitions shall apply; indirect discrimination where an apparently neutral provision criterion or practice would put persons of one sex at a particular disadvantage, compared with persons of the other sex, unless that provision criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary."

13. That introduces a condition. The verb "would put" creates a hypothesis. The judge acknowledged that there was strength in that argument, so strictly speaking it is not an issue for me to determine today. I agree the judge was looking at whether or not the Claimants had no reasonable prospects under European law, but at least this strand of her judgment is in favour of the Claimants. It cannot be said that she was of the view that the argument based on the applicable directive had no reasonable prospects of success and for that reason I will concentrate on the first two issues.
14. In my judgment Mr Draycott is correct; the minimum terms required to be met are those set out in Bilka-Kaufhaus [1987] ICR 110 ECJ and they are aptly summarised in the following way: (1) there are full time comparators who have been admitted to the pension scheme carrying out like work, let us assume in this case, while part time Claimants have been excluded; (2) the exclusion of part time Claimants either does or would have a disproportionately adverse effect upon women; (3) there is no objective justification for the same. That arises from Bilka where the following passages are relevant:

"24. In the first of its questions the national court asks whether a staff policy pursued by a department store company excluding part-time employees from an occupational pension scheme constitutes discrimination contrary to article 119 where that exclusion affects a far greater number of women than men …

29. If … it should be found that a much lower proportion of women than of men work full time, the exclusion of part-time workers from the occupational pensions scheme would be contrary to article 119 of the Treaty where, taking into account the difficulties encountered by women workers in working full time, that measure could not be explained by factors which exclude any discrimination on grounds of sex …

31. The answer to the first question referred by the national court must therefore be that article 119 of the EEC Treaty is infringed by a department store company which excludes part time employees from its occupational pension scheme, where that exclusion affects a far greater number of women than men, unless the undertaking shows that the exclusion is based on objectively justified factors unrelated to any discrimination on grounds of sex.'"

15. To exclude the Claimants from the right to raise this argument at this stage would be to shut them out of the judgment seat of a claim which might well be conclusive in their favour. In my judgment Mr Draycott has raised an issue as to what the Claimants must prove for the purposes of Article 141. In ordinary cases I can understand that a person needs to show an actual detriment, but in this case the issue is breach of contract by reason of the equality clause. I cannot say that the amended claim has no reasonable prospect of success. The assumption has been based upon Employment Judge Macmillan's approach to the opters, that some subjective examination of the Claimant's circumstances is required. But in the light of the plain wording of the passages in Bilka it seems to me that to do so may well be to overlay Bilka with additional criteria.
16. I can easily decide that it cannot be said the amended claim has no reasonable prospect of success. I will allow the appeal. Having detected a wrong approach by the Employment Judge, it is for me to consider whether the amendment should be allowed and in the interest of the overriding objective I will exercise the discretion to allow it. In my view, this is a matter which ought to be determined on findings of fact by an Employment Tribunal. The argument ought to be deployed for I would be loath, except in a clear case, to say that an argument based on a European principle could not be advanced by the Claimants. Strictly speaking the issue was not determined in Preston (No. 3) and it is open to an Employment Tribunal to hear full argument upon the point.
17. It follows that further directions need to be given by the Employment Tribunal.
18. Mr Brochwicz-Lewinski accepts, on this footing, that there ought then to be a full hearing on the merits of the Claimants' cases and Mr Draycott still seeks a pre-hearing review. For the reasons I have given, the sooner this case is determined on its merits the better and I will direct now that subject to any further case management at the Employment Tribunal this case should be tried at a hearing.
19. The issue of the opters may have some significance beyond this case but it is important to understand the reach of my judgment. It is that the issue is to be given life at the Employment Tribunal and findings are to be made. The Claimants are not to understand from this that they will succeed; it is just that they are to be given the right to make the argument. It follows from my approach that these issues are best determined once findings have been made. I do not consider there are reasonable prospects of success, nor a compelling reason for the Court of Appeal to be exercised. Permission to appeal is refused. [full reasons not transcribed].