Reith & Ors v British Airways Plc [1991] UKEAT 363_87_2910

EAT
Reith & Ors v British Airways Plc
[1991] UKEAT 363_87_2910 · 1991-10-30
MR JUSTICE WOOD (PRESIDENT): The applicants Mrs Reith, Mrs Aldridge and Mrs Ruston were each compulsorily retired on their 60th birthdays during July and early August 1986. By their Originating Applications respectively of the 4th August the 22nd July and the 26th August 1986 they each claim unlawful sexual discrimination "In breach of the Sex Discrimination Act, Sections 11(a) and 62(b) in conjunction with Article 5(i) of the Equal Treatment Directive 76/207."The defence of British Airways was first that Section 6(4) of the Sex Discrimination Act 1975 should apply and secondly, "that the applicant is not entitled to rely upon Article 5(i) of Directive 76/207 as against the respondents since they are a private employer and not a state authority."The applicants were represented by a senior area organiser of Association of Professional, Executive, Clerical and Computer Staff (APEX) advised by the Equal Opportunities Commission (EOC). A hearing took place before an Industrial Tribunal sitting in London under the Chairmanship of Mr Milton on the 15th, 16th and 17th December 1986. The unanimous decision of the Tribunal was that:
"Upon the preliminary issue the applicants are not entitled to rely upon EEC Council Directive Article 5(i) 76/207 against the respondents and their applications are therefore dismissed."
The two issues before the Industrial Tribunal are clearly emphasised in paragraph 3 of the Decision where they say:
"Our clear conclusion is that it is at present settled law that the EEC equal treatment directive may not be invoked against an individual so as to defeat the operation of the Section 6(4) Sex Discrimination Act exemption UNLESS the individual is found to be an individual or body included within the definition "Member State"."
and then a little later they say:
"In his closing address Mr Carpenter on behalf of the applicants argued that we should entertain the claim in any event "on general principles" since Section 6(4) of the Sex Discrimination Act 1975 was "contrary to the spirit" of the EEC Directive and this in some way void."
The Industrial Tribunal examined the facts with great care; they were referred to a number of authorities including MARSHALL v SOUTHAMPTON & SOUTH WEST HAMPSHIRE AREA HEALTH AUTHORITY (TEACHING) [1986] IRLR 140 ; FOSTER v. BRITISH GAS plc [1987] ICR 52 and many others.Their conclusions are to be found in paragraph 16 which reads:
"We have taken all the foregoing facts and matters into account to arrive at our decision. We consider that, above all, the facts surrounding the employer/employee relationship are important. The equal treatment directive is aimed at discrimination in the employment field. We are a Tribunal concerned almost exclusively with employment issues. The most significant passage in Marshall's case seems to us therefore to be that contained in the opinion of the Advocate General at page 347;
`The state can legislate but a private employer cannot. It is precisely because the state can legislate that it can remedy its failure to remedy the directive concerned ....'We have found that the applicants' contracts of employment are outside the control of the state. Accordingly we find that B.A. is not a `state authority' within the meaning of the second ruling of the European Court in Marshall's case. The applicants cannot rely on article 5(1) of the equal treatment directive against the respondents so as to defeat the operation of section 6(4) of the Sex Discrimination Act 1975. Their applications are therefore dismissed."The applicants filed a Notice of Appeal dated the 24th April 1987. The relevant part of paragraph 3 of that Notice reads:
"The Appellants' appeal ... on the following questions of law, namely the proper construction and effect of s.6(4) of the Sex Discrimination Act 1975."

The grounds of appeal are phrased in two paragraphs - the first alleges

"The Industrial Tribunal erred in law in failing to consider the appellants' arguments that by dismissing the Appellants at the age of 60 when a comparable male employee would have been allowed to continue work until the age of 65, the Respondents unlawfully discriminated against them on grounds of their sex contrary to s.1(1)(a) read with s.6(2) of the Sex Discrimination Act 1975.
The second is as follows:"The Industrial Tribunal erred in law in failing to consider the arguments that s.6(4) of the said 1975 Act does not provide a defence to an act of sex discrimination as to whether or when a person should retire ... as interpreted by the European Court of Justice in Marshall ".It is right to note that this is precisely the issue which was raised in Duke v. GEC Reliance Ltd [1988] ICR 339 : HL.With that Notice of Appeal a letter was sent to the Registrar of this Court by the National Secretary of APEX. It is signed by Miss Rita Stephen for Mr Carpenter. The second and third paragraphs of that letter read as follows:
"The case related to differential retirement ages for men and women in private sector employment. I am informed that there is a case on the same issue which is presently on appeal to the House of Lords. That case is Duke v. GEC Reliance Systems Ltd.
I would respectfully ask the Tribunal to register my notice but then to hold the matter in abeyance until such time until the final decision is made by the higher Courts on the case I mention above."This request was duly complied with. The parties were notified by a stereotyped form of letter of the 29th May 1987 at the end of which is inserted the note:
"The appeal is hereby stayed pending the outcome of Duke v. GEC Reliance Systems Ltd in HL."
That case was decided on the 11th February 1988.On the 16th March 1988 the Registrar of this Court wrote to Mr Carpenter saying:
"Now that the House of Lords decision in the case of Duke v. GEC Reliance has been promulgated will you please state whether you intend to pursue the above appeal."
By a letter of the 16th March Mr Carpenter replied:
"As my members' claims are the same as Mrs Duke's, I realise that they cannot now succeed and therefore I wish to withdraw the claims from the Tribunal."
As a result an Order of this Court was drawn up which reads:

"UPON THE APPLICATION of the Appellants

THE TRIBUNAL GIVES LEAVE for the Appeal to be withdrawn."

That was dated the 18th March 1988 and a copy of that Order was sent to Mr Carpenter and also to the Solicitors for British Airways.FOSTER v. BRITISH GAS plc [1991] ICR 84 , was decided by the European Court of Justice on the 12th July 1990.The next that this Court heard about the matter was a letter of the 12th December 1990 from the National Legal Officer of GMB, which by that time was amalgamated with APEX, enclosing an application under Rule 26(1)(c) of the Employment Appeal Tribunal Rules seeking a review of the Order of the 18th March 1988. It was received in this Office on the 14th December. On the 10th January this year I directed that this application should be heard inter-partes.What happened between March 1988 and December 1990 is now made clear through affidavits from Mr Carpenter and from the Senior Legal Officer of the GMB, Mr O'Hara. From the beginning Mr Carpenter sought the assistance and the advice of the EOC. The EOC advised as to the Appeal and indeed drafted the Notice of Appeal. They also gave the advice that the appeal should be stayed pending the Decision in the House of Lords in Duke .After the Decision in Duke in the House of Lords, the EOC advised that as a result of that Decision the applicants would lose their appeals and in the light of this advice Mr Carpenter decided to withdraw them. The letter seeking leave to withdraw was written by him without discussion with the respondents and as he puts it:
"The appeals were unilaterally abandoned and not as a result of an agreement of any kind with the respondents."
Mr Carpenter was aware of the Foster Decision in the European Court of Justice in about August of 1990 but did not consider that it had any relevance to the appeals of the applicants. In October 1990 the National Legal Department of GMB wrote to him asking for the papers in these appeals. He was asked to investigate the status of the membership of the four applicants and on the 14th November 1990 wrote to each of them; upon abandonment of their appeals they had ceased to pay their subscriptions. One of them did not wish to continue but the other three indicated that they wished to join GMB with the possibility of re-opening their claims. He so informed the National Legal Department on the 5th December 1990.Mr O'Hara first became aware of the position in September 1990 when a member of his staff drew his attention to these claims which had been handled on the advice of the EOC. In view of that fact he approached the EOC who, in October 1990, replied that they did not feel able to assist. As we were informed during the hearing this was not a question of financial assistance . Thereafter he obtained the papers and sought advice from Counsel on the 6th November; the written advice together with the application for review was received by him on the 14th November. Thereafter he made enquiries of Mr Carpenter and ultimately the application was sent to this Court with the letter of 12th December.Much has been made of the fact that Mr Carpenter, although a senior official, was not legally qualified. That is of course true, but it is right to balance against that the fact that he was advised throughout by the EOC, which not only has its own Legal Department but is, by its very being, interested in all matters of discrimination.The case of Foster was referred to by the Industrial Tribunal in its Decision and was also being heard in this Court, the Court of Appeal, and in the House of Lords during the currency of this period. It was reported at each stage - [1987] ICR 52 IT; [1987] ICR 904 EAT; [1988] ICR 585 CA.We have set forth the main dates and happenings in the history of this matter but we emphasise that we have read all the documentation and have looked at the whole situation in the round.We have been greatly assisted by submissions from Professor Hepple and Mr Elias. Although we do not set out every single facet of those submissions we take them all into account. The salient features we now address.Before we can properly approach a decision of any kind it is important to analyse what has already taken place and in particular to look at the issues raised. We have already referred to some relevant passages from the Decision of the Tribunal, and to the Notice of Appeal. Our attention was also drawn to the skeleton argument produced on behalf of the applicants before that Tribunal. Presumably it was prepared with the help of the Legal Department of the EOC. It is a precise and well argued document.We are quite satisfied that the applicants based their cases on two issues. The first was the MARSHALL issue of the direct application of EC Directive 76/207 which involved proving that British Airways was an "emanation of the state", and secondly, upon what has been termed the DUKE argument, that Section 6(4) of the Sex Discrimination Act 1975 (before the amendment on 7th November 1987) did not save private enterprise from being liable for breach of the Directive. The first issue was decided against them. There was no appeal from this finding. The applicants felt that the second issue had not been fully considered and it was upon this second matter that the appeal was based. Hence when DUKE was decided contrary to the argument to be raised on appeal, the appeals were abandoned.Thus if an appeal were allowed to be restored, leave to amend would be required.We now have to exercise three discretions. The first is whether to allow the application for review to be made out of time. (The limit under the rules is 14 days). Secondly, if we decide that first question in favour of the applicants we must decide whether to allow the appeal to be re-established. Thirdly, if the first two questions are answered in favour of the applicants we must decide whether in our discretion we should allow the Notice of Appeal to be amended in order to include a point which was not before this Court in the original Notice of Appeal. So far as this last discretion is concerned it is really in effect allowing an appeal out of time and that time has been extensive.The first matter raised by Professor Hepple for the applicants is that the Order of March 1988 was simply giving leave to withdraw; that this was a unilateral voluntary act; that even if the Order had read "dismissed", the applicants could still have sought to have the appeal reconstituted because there was no compromise; that it was only if there was an agreement that the original cause of action ceased to exist. He relied upon:-

EDEN v. HUMPHRIES [1981] ICR 183

TIMES NEWSPAPERS LTD v. FITT [1981] ICR 637

ACROW (ENGINEERS) LTD v. HATHAWAY [1981] ICR 510

MULVANEY v. LONDON TRANSPORT EXECUTIVE [1981] ICR 351.The legal distinction that he takes is clearly a valid one, but the reality of this case is that the applicants abandoned their appeals, that the respondents were so informed and thereafter conducted their affairs on this basis. It may be preferable in the future that a consent be signed by each side and that the consideration should be the waiving of any claim for costs.The time limit for seeking a review is 14 days; it is to be compared with that for filing a Notice of Appeal, 42 days, and when one looks at the grounds upon which a review can be based it seems to us that the real purpose is to correct errors in procedure or other mistakes which come to light within a comparatively short period of time.The cases cited above tend to support this approach. The periods of time involved were relatively short, and for the most part the issues were procedural.The second submission made by Professor Hepple is that the delay in this case is relatively short and only exists from the early part of November 1990 until the 14th December when the present application was received in these Courts. He emphasises that the knowledge of the applicants only extended over that period. We find ourselves unable to take this view. At all material times the applicants were in the hands of those whose particular interests and skills lay in the development of the law on discrimination. European law was and is a fast developing area, but FOSTER was passing through the Courts and was being reported; its outcome in the European Court of Justice was awaited. At least by August 1990 those who had been acting for or advising the applicants were or should have been aware of the Decision in the European Court of Justice. The respondents could have been informed; an application could have been made to this Court. The period of 14 days has on any view been considerably exceeded, and we are not satisfied that the delay has been adequately explained.However, when considering any amendment the period of delay extends over years and such an application can have virtually no prospect of success when viewed in the light of the principles established in MARSHALL v. HARLAND & WOLFF LTD [1972] ICR 97 and followed thereafter. See also DUKE v. PROSPECT TRAINING SERVICES LTD [1988] ICR 521.The Professor is not daunted by such thoughts and submits that the House of Lords has allowed issues to be raised again in special circumstances and that it would be right to allow the FOSTER issue to be raised in this Court rather than requiring the applicants to start afresh in an industrial tribunal at which stage he submits they would be successful in overcoming a plea of Res Judicata.He relies upon ARNOLD v. NATIONAL WESTMINSTER BANK PLC [1991] 2 AC 93. He submits that the special circumstances in that case at p.103H are very similar to those in the present case and that there is a continuing contractual relationship under the pension arrangements with British Airways under which the applicants will suffer future hardship. Upon the particular facts of this case the latter point would need careful examination, but we are unable to accept that ARNOLD applies because the present case would be one of "cause of action estoppel" and not "issue estoppel", a distinction clearly taken by Lord Keith of Kinkel at p.105C; p.105E; p.109A; p.110F-G. The case of PROPERTY AND REVERSIONARY INVESTMENT CORPN.LTD v. TEMPLAR [1977] 1 WLR 1223, was cited in ARNOLD but was special to its own facts, and included some special circumstances.The last submission for the applicants was that this Court was under a duty to apply community law. That is clear. Reliance was placed upon VAN COLSON v. KAMANN [1984] ECR 1891 . It is therefore argued that this Court is in breach of community law if it does not allow the applicants to bring their claim. It seems to us that they have been allowed to bring their claim. They did so; the decision was against them and they did not appeal. This is essentially a procedural matter for the National Court. See EMMOT v. MINISTER FOR SOCIAL WELFARE AND ATTORNEY GENERAL [1991] IRLR 387 . This was an appeal from the High Court in Dublin and the European Court held that time did not begin to run against an applicant seeking remedy under the direct application of Direction 76/207:"So long as the Member State has not properly transposed that Direction into its domestic legal system".The Directive 76/207 is dated the 9th February 1976. MARSHALL was decided on 26th February 1986. The European Court of Justice held that the Equal Treatment Directive in its use of the word "dismissal" covered retirement in accordance with an employer's policy and could be of direct application to public bodies. That was a radical change in the law as then understood. Culpability could scarcely be said to run until after that Decision. - See DEFRENNE v. SABENA [1976] ICR 547 and BARBER v. THE ROYAL EXCHANGE ASSURANCE GROUP [1990] ICR 616 . The applicants were dismissed in July and August 1986. Section 6(4) of the Sex Discrimination Act 1975 was amended on 7th November 1986. Thereafter the MARSHALL position was rectified. British Airways was privatised early in 1987, from which date it is conceded that it was not an "emanation of the State".It is submitted that the position has not been rectified for those dismissed between February and December 1986. It is argued that any public body would be allowed a reasonable time to rectify its position under its arrangements for pensions and normal retirement age, and thus the Member State had acted properly upon this issue.Mr Elias made a number of submissions, some of which are already reflected in our reasoning above and which we accept. However, in addition he submitted that there should be finality in litigation and relied upon the dictum of Phillips J. in FLINT v. EASTERN ELECTRICITY BOARD [1975] ICR 395, 404H. Secondly, he submits that the issue of FOSTER was uncertain at the time when the appeal was launched and the applicants deliberately, on advice, chose not to take that point. Thirdly, he submits that there would be a grave prejudice to the respondents because if the appeal was reconstituted then it was likely that the case would be taken through all the Courts here and that the Decision in DUKE would be challenged in Luxembourg. Lastly, he submits that the future relationship between the parties would not be seriously affected. We note that in fact the state had no control over the British Airways Pension Scheme.In looking at the whole case in the round, we thought it right to hear short submissions on the merits. We consider that the correct test to be applied is that stated by Lord Templeman in the House of Lords in FOSTER v. BRITISH GAS PLC [1991] ICR 463 where at page 467E he says:
"Accordingly it falls to this House now to determine whether BGC was a body which was made responsible pursuant to a measure adopted by the state, for providing a public service under the control of the state and had for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals."
Subject possibly to the pension point the issue of control is conceded by Mr Elias. He also concedes that the case is arguable; we would not put it any higher.Having considered all the circumstances and the most helpful submissions from both sides, we decline to exercise our discretion to extend time for a review. If we are held to be wrong in the exercise of this discretion we would not set aside the Order of March 1988. If we are held to be wrong on both these matters then we would not in the exercise of our discretion grant leave to amend the Notice of Appeal which amendment is in our judgment required if the applicants are to proceed further.