United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P EPSTEIN (One of Her Majesty's Counsel) MS L CHUDLEIGH (of Counsel) Instructed by: Birmingham City Council (Legal Services) Ingleby House 11-14 Cannon Street Birmingham Warwickshire B2 5EN
For the Respondents For the Respondents	MR A SHORT (of Counsel) Instructed by: Messrs Thompson Solicitors The McLaren Building 35 Dale End Birmingham B4 7LF MS D ROMNEY (One of Her Majesty's Counsel) Instructed by: Messrs Stefan Cross Solicitors Buddle House Buddle Road Newcastle Upon Tyne Tyne and Wear NE4 8AW


 


SUMMARY

PRACTICE & PROCEDURE: Chairman Alone

An Employment Judge decided, contrary to the usual practice and the expectations of the parties, to sit alone on a forthcoming PHR to determine the 'material factor' defence in two major equal pay multiples.

Held:

(a) that the reasons for his decision were flawed, and that the usual practice of hearing such an issue with lay members was sound; and

(b) that the right decision at the time that it was taken would have been to direct a hearing by a full tribunal; but

(c) since the effect of now substituting such a decision would be to necessitate a substantial adjournment, the lesser of two evils was to allow the decision to stand.

THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)

1. This appeal arises from heavy equal pay litigation proceeding in the Birmingham region. Many thousands of claims have been brought against the Appellant, Birmingham City Council, and although many have been settled we are told that there are over 4,000 still outstanding. The present appeal is concerned with two multiples being heard together, which between them number some 2,000-3,000 Claimants.
2. At a case management discussion on 4 December 2008 it was directed that a pre-hearing review should be held at which to decide whether the Council had a defence to the Claimants' claims under section 1(3) of the Equal Pay Act 1970 - to use the usual shorthand, a "GMF defence". For some Claimants this would be the dispositive issue as regards liability, since they are accepted as being employed on work rated as equivalent with the work of their comparators. For others it involves an assumption that they will in due course - this issue not yet having been dealt with - establish that their work was of equal value to that of their comparators.
3. The hearing of the GMF issue was listed for 30 days, due to start on 2 November - that is to say, next Monday. It is not in fact the first time that a PHR to deal with this issue had been listed: there have, we were told, been at least four previous adjourned dates, though it may be that these earlier dates were somewhat unrealistic.
4. The litigation involving these multiples has involved a number of other hearings, and in particular a number of PHRs earlier this year dealing with jurisdictional issues arising under section 32 of the Employment Act 2002, limitation issues and questions as to whether individual claims have been settled. The case management has been in the hands of Employment Judge van Gelder, and we are told that in each of the recent PHRs dealing with the matters that we have indicated he has sat with the same team of lay members. It is common ground that the expectation engendered by this practice was that a tribunal constituted in the same way - that is to say, by Employment Judge van Gelder and the same two lay members - would sit on the GMF PHR, although it is accepted that no explicit statement to that effect was ever made. On 30 September, however, the Tribunal informed the parties that the judge conducting the PHR would be Employment Judge Goodier. The parties do not know, and nor do we, the reason for that change, though it may be something to do with the pressures placed on what I might call the van Gelder Tribunal by the number of PHRs with which it had already had to deal, and in which we are told the judgments are still outstanding. The notification from the Tribunal said nothing either way about the lay members; but we are told, again, that in the light of the expectation already generated it was assumed by all parties that Judge Goodier would sit with lay members, whether or not they were the same ones that had been sitting with Judge van Gelder.
5. A case management discussion was fixed before Judge Goodier on 21 October - that is, just over a week ago - in order to review progress. The Claimants fall into three groups - one represented by Stefan Cross Solicitors, one by Messrs Thompsons and one by a firm called Carvers. The Carvers Claimants were, however, for present purposes being represented by Stefan Cross. Counsel for the Cross and Carvers Claimants was Ms Bourke. The Thompsons Claimants were represented by Ms Cunningham and the Council by Mr Paul Epstein QC. A number of case management issues fell to be dealt with. Towards the end of the hearing, as one of the items on a list to do with the management of the forthcoming hearing itself, the Judge raised the question of whether the PHR should be conducted by a full tribunal or by himself alone. He said that his "strong inclination" was to sit alone but that he would hear submissions to the contrary if the parties wished. This announcement was wholly contrary, for the reasons already given, to the parties' expectations. It was not in fact a complete surprise to Mr Epstein only because he had been alerted just before the start of the hearing by the Tribunal clerk that this was a matter which the Employment Judge wished to raise and on which indeed he was said to have strong views. When the Judge raised the point Mr Epstein was in a position only to make short submissions referring to the relevant rule but not to any of the authorities. He resisted the suggestion that the Judge should sit alone. Even shorter submissions supporting his stance were made by Ms Cunningham and Ms Bourke.
6. It is convenient at this stage to set out the terms of the relevant rule, which is rule 18 of the Employment Tribunal Rules of Procedure, which form schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. Rule 18(1) reads as follows:

"Pre-hearing reviews are interim hearings and shall be conducted by an Employment Judge unless the circumstances in paragraph 3 are applicable ..."

We can pass over paragraph 2. Paragraph 3 reads as follows:

"Pre-hearing reviews shall be conducted by a tribunal composed in accordance with section 4(1) of the Employment Tribunals Act if  -

(a) a party has made a request in writing not less than 10 days before the date on which the pre-hearing review is due to take place that the pre-hearing review be conducted by a tribunal instead of an Employment Judge; and

(b) an Employment Judge considers that one or more substantive issues of fact are likely to be determined at the pre-hearing review, that it would be desirable for the pre-hearing review to be conducted by a tribunal and he has issued an order that the pre-hearing review be conducted by a tribunal."

(A "tribunal composed in accordance with section 1 of the Employment Tribunals Act" - that is, the Employment Tribunals Act 1996 - is a tribunal consisting of an Employment Judge and two lay members.) None of the parties had, at the date of the hearing before Judge Goodier, made a request in writing of the kind referred to at rule 18(3)(a) because of their understanding that the PHR was to take place before a full tribunal in any event. But they were still in time to do so, and the matter proceeded before the Judge on the basis that such a request would be made, as indeed it now has been.

7. The Judge, having heard the parties' submissions, indicated forthwith that he remained of the view that he should sit alone. He gave brief reasons orally, which Ms Cunningham noted as follows:

"I am against you for this reason. 18(3) provides, it seems to me, that although there is a balancing exercise between on the one hand the value that the lay members will bring and on the other hand the inevitable delay and additional cost that is occasioned by the involvement of lay members. The issues in this case are going to include numerous questions of fact but they are not particularly the sorts of questions of fact on which lay members are likely to have expertise. They are the sort of thing determined in the High Court by a judge sitting alone so the PHR will be conducted by me sitting alone."

8. Mr Epstein asked for written reasons. Such reasons were provided on 23 October. These read as follows:

"12.1 I raised with the parties the question of mode of trial. By Employment Tribunals Rules of Procedure Rule 18(1), a PHR is to be conducted by an Employment Judge alone "unless the circumstances in paragraph (3) [of Rule 18] are applicable." Those circumstances are:

"(a) a party has made a request in writing not less than 10 days before the date on which the pre-hearing review is due to take place that the pre-hearing review should be conducted by a tribunal instead of an Employment Judge; and

(b) an Employment Judge considers that one or more substantive issues of fact are likely to be determined at the pre-hearing review, that it would be desirable for the pre-hearing review to be conducted by a tribunal and he has issued an order that the pre-hearing review be conducted by a tribunal."

12.2 The parties expressed a preference for hearing by a full tribunal. I considered their submissions but decided that the hearing should be conducted by me as Employment Judge alone. My reasons were as follows.

12.3 In this case, the formal requirement for trial by a full tribunal under Rule 18(3)(a) (request by a party with 10 day's notice) had not been met before the CMD, but could (just) be complied with before the start of the PHR. The final requirement under Rule 18(3)(b) (an order for such trial) could also be complied with. The question was, how should the remainder of Rule 18(3)(b) be applied? There is no doubt that on this PHR there will be numerous disputed issues of fact. There will also, it seems certain, be complex and weighty issues of law. In my view the first and second requirements of Rule 18(3)(b) (substantive issues of law, and desirable for hearing by full tribunal) are separate and cumulative. The fact that there are substantive issues of fact may point to its being desirable for the hearing to be by a full tribunal, but cannot be determinative of that question, or there would have been no point in the recital of the second requirement. There is therefore a discretion to be exercised. In the exercise of it, I must identify and balance the relevant factors.

12.3 Factors in favour of a full tribunal seem to me to be that:

(a) there is generally a presumption in favour of a full tribunal where there is likely to be a dispute of fact (see Employment Tribunals Act 1996 s4(5));

(b) the lay members together with the Employment Judge make up "the industrial jury", and participate in a collegiate decision; and

(c) lay members may contribute valuable knowledge of the principles of good industrial relations practice.

12.5 Factors against are that:

(a) in a case such as this, the issues of fact are likely to be mainly matters of detail, such as are tried by Judge alone in the civil courts every day without difficulty, rather than questions turning on the truthfulness of witnesses, or more emotive matters which commonly arise for example in non-Equal Pay discrimination cases;

(b) the issues of law are likely to be ones on which most lay members would rely heavily on the Employment Judge, so that the extent of their participation would in truth be limited;

(c) with great respect to lay members, one can overstate the proposition that an Employment Judge alone is a resident of an ivory tower – many, myself included, have been full-time Employment Judges for some years, and before that had many years experience of employment and industrial relations matters as practitioners specialising in employment law; and

(d) the involvement of lay members would inevitably (and, in the light of my experience, very considerably) slow down the hearing, so adding to the cost of the litigation to the parties and to the community at large, and the risk of further delay in this already very protracted litigation.

12.6 Weighing the above factors against each other, and even taking into account the expressed preference of the parties, I was firmly of the view that trial by judge alone is the better option."

9. The Council has appealed against that decision. We have, for obvious reasons, heard the appeal at short notice. It seemed to me appropriate, notwithstanding that the appeal was against the decision of a Judge sitting alone, to direct, pursuant to section 28(4) of the 1996 Act, that I should hear it with lay members. Unfortunately one of the members who was due to sit was seriously delayed in reaching the Tribunal, and with the agreement of the parties pursuant to section 28(3) of the 1996 Act we sat with only one lay member, Ms Switzer.
10. The Council has been represented by Mr Epstein, leading Ms Chudleigh, the Cross and Carvers Claimants have been represented by Ms Daphne Romney QC and the Thompsons Claimants by Mr Short.
11. In view of the fact that a decision and reasons are needed urgently, and in view also of the lateness of the hour, we can give our reasons fairly shortly, dealing only with those points which are necessary to explain to our conclusion.
12. Mr Epstein had essentially two submissions before us – first, that the Employment Judge misdirected himself; and, secondly, that the way in which the matter had been handled amounted to a procedural unfairness.
13. We take first the question of misdirection. As to this he makes what can be analysed as five points.
14. First, Mr Epstein says that the Judge took no account of the fact that, while the PHR was formally an interim hearing, it would in practice involve the final determination of an issue which would be dispositive either way of the claims of the "rated-as-equivalent claimants" and decisive of a key substantive issue in the case of the "equal value claimants". He reminded us of the observations of this Tribunal, Morison P presiding, in Sutcliffe v Big C's Marine [1998] IRLR 428 about the undesirability of applicants losing their entitlement to have their substantive case decided by a full tribunal, the so-called industrial jury, because the issue came before the tribunal packaged as a preliminary issue (see in particular paragraphs 15 to 16 of the judgment, at p430). That is, in our view, a cogent point. The Judge made no reference whatever to this factor.
15. Secondly, he says, the Judge's "factor (a)" is based on the implicit proposition that the input of lay members on factual issues is principally valuable in cases where those issues concern either the truthfulness of witnesses or "emotive matters" and that they are less valuable on "matters of detail". Mr Epstein submits that that is plainly a misdirection. We see force in that point also. To be fair, the Judge may not have expressed himself quite as he intended, and we dare say that his essential point was that the factual issues relating to the GMF, which will essentially be concerned with the development of the Council's pay practices and policies over a period of many years, would not call on the typical particular expertise of lay members in industrial relations matters - especially as any who might have direct experience in this particular field would probably be conflicted out. If that is indeed all that the Judge meant, we accept that it is true up to a point, and we take it into account ourselves at a later stage of our decision. But, even so, his approach may properly be criticised as seriously undervaluing the role of the lay member, which is not limited to input on specific issues of industrial relations practice and the like. In this regard Mr Epstein relied not only on Sutcliffe but on a number of other decisions in this Tribunal which emphasise the value of the contribution of lay members - in particular, Sogbetun v London Borough of Hackney [1998] IRLR 676 and Morgan v Brith Gof Cyf [2001] ICR 1978 (although the latter decision was cited to us only as summarised in Harvey - see at paragraph T35).
16. Thirdly, Mr Epstein criticises the Judge's "factor (c)". This point is similar to that already considered. While it is no doubt true that the Judge himself, like an increasing proportion of Employment Judges, has very substantial experience in employment law and in industrial relations problems, derived from previous practice as an employment lawyer, that does not substitute for the particular value of lay members as non-lawyers who demonstrably have experience of workplace involvement on behalf of both employees and employers. That value is not only substantive but is important to the perception of the Employment Tribunal by the parties who bring their cases before it.
17. Fourthly, as to "factor (d)", Mr Epstein submits that, while as a matter of common sense and common experience it can be accepted that a hearing with lay members will generally take somewhat longer than a hearing before a Judge sitting alone - although, we hasten to say, not for any reason which reflects ill on the lay members - the difference is not likely to be so great as to make a disproportionate impact on the length of the hearing or, therefore, the costs for the parties; and to the extent that the involvement of lay members does involve additional time and therefore additional cost, that is the inevitable price to be paid for the advantages that they bring. We agree with that. We should say that we are also concerned about the Employment Judge's reference to cost. We see no objection in principle to a tribunal taking into account the costs to the parties of any additional time that may be caused by the use of lay members, though for the reasons that we have just given that is unlikely to be a substantial factor. But we would be very concerned about any suggestion that the cost to the public purse was a relevant factor in a case where the criteria for the use of lay members were otherwise satisfied. As Morison P observed in Sutcliffe, at paragraph 15:

"the quality of justice must not be allowed to deteriorate because of resource implications."

18. Fifthly, Mr Epstein submitted that the Judge placed inadequate weight on the fact that all the parties before him wished the PHR to be conducted by a full tribunal. That factor cannot of course be decisive, but it is entitled to very considerable weight, especially as it is the parties who will be bearing the burden of such additional time and consequent cost as the involvement of the lay members may lead to. If this criticism stood alone, it could not undermine the decision since the Judge clearly understood and referred to the fact that he was reaching a different position from that sought by the parties; but we do nevertheless find it somewhat surprising that his decision was one for which none of the parties had argued.
19. We turn to the allegation of procedural unfairness. The basis for that has already been sufficiently set out. Essentially Mr Epstein's complaint was that he, and indeed the other parties, were given effectively no notice whatever of a fundamental change in how they were entitled to expect that the PHR would proceed. Although we are bound to say that we do not regard the way in which this matter was handled by the Tribunal as being at all satisfactory we could not go so far as to say that, if this point stood alone, it would vitiate the decision of the Employment Judge. He did, after all, tell the parties what he intended and give them the opportunity to make submissions. We do not understand that any of the counsel before him asked for further time or an adjournment in order to allow for the development of fuller argument.
20. Notwithstanding our conclusion on that last point, because of our views on Mr Epstein's other points, as already set out, we are satisfied that the decision of the Employment Judge was legally flawed. It is common ground that in the circumstances of the present case it would be inappropriate for us to remit the question back to the Employment Judge for reconsideration. It is for us to exercise the discretion afresh pursuant to our powers under section 35 of the 1996 Act.
21. It will be apparent from what we have already said that if we had been in the position of the Judge we would not have taken the decision which he did. In our view it is certainly desirable that lay members should sit on this hearing. We have been told that in the collective experience (both direct and indirect) of the counsel before us what we may, however clumsily, call "GMF PHRs" are invariably heard by full tribunals; and that seems to us wholly appropriate, though we do not lay down any universal rule that it must always be so.
22. We do not, however, think that we can go so far as to say that it is essential in the interests of justice that a full tribunal should sit on this PHR. There is, regrettably, one factor which weighs very heavily in the opposite balance. The Claimants submitted to us that it was likely that if the Tribunal had to find lay members at very short notice to sit for the 30 days allocated, that would prove impossible, and the result would be an adjournment – and, further, that any adjournment would be for very many months. The Birmingham Tribunal is exceedingly busy, and it was suggested it might take as long as a year for a date to be found for a 30 day hearing involving a full tribunal and having regard to the availability of all the Counsel who have been involved in this litigation from the start.
23. We were anxious to have the best possible information on this, and at my request the Deputy Registrar made inquiries this morning of the Birmingham Tribunal. The Tribunal confirmed that there was no question of the case being able to be heard from Monday with a full tribunal and that any adjournment would indeed be for very many months. We will proceed on the basis that any adjournment would certainly be for a minimum of six months and might well be for considerably longer. The Claimants regard that degree of delay as unacceptable; and it is largely, if not wholly, for that reason that they have before us sought to uphold the decision of the Employment Judge, despite having argued for a different outcome below - at a time when they no doubt assumed, we hope correctly, that a full panel would have been available if needed. Ms Romney and Mr Short emphasised to us that the bulk of these cases were brought between two and three years ago and that there has already been, as we have mentioned, a history of adjournments: in particular, the occasion for the fixing of the present date was the contested decision to adjourn a date fixed for February 2009. If the present dates were lost and there were a delay of a minimum of a further six months - and perhaps more, as we have said - the eventual resolution of the case would be still further in the future, particularly for the equal value claimants, in respect of whom there were substantial issues still to be tried.
24. This is a most unhappy situation. It is most unfortunate that we have to make a decision based on a choice between two evils – one, substantial further delay in this case, and, the other, that the case should proceed on what we regard as a certainly less desirable basis with a Judge alone. But we have come to the conclusion that the former factor must prevail. We do not resile in any way from what we have said about the desirability of the involvement of lay members in a hearing of this kind, but we cannot go so far as to say that it is indispensable in the interests of justice. On the contrary, we are sure that justice can still be done, and will be done, by the present Employment Judge sitting alone. We repeat that it is most unfortunate that this situation should have arisen. It does not reflect very well on the way in which the litigation, at least in this respect, has been managed by the Birmingham Tribunal; but we are where we are, and for the reasons which we have given we dismiss this appeal.