Malik v Post Office Counters Ltd [1992] UKEAT 282_91_1610

EAT
Malik v Post Office Counters Ltd
[1992] UKEAT 282_91_1610 · 1992-10-16
MR JUSTICE KNOX : Mr Malik appeals from the decision of the Industrial Tribunal sitting at Nottingham on the 21st February 1991 which dismissed his application for relief in respect of discrimination on racial grounds in connection with the withdrawal of a conditional offer of appointment as a sub-postmaster. On the 10th August 1989 a letter was written on behalf of Post Office Counters Ltd to Mr Malik informing him that his application for appointment as sub-postmaster Stockton Brook had been successful. The appointment was however stated to be subject to the condition (inter alia) that satisfactory references for Mr Malik were received. One week later a further letter was written to Mr Malik saying that inquiries into his references were complete and unfortunately, the writer said, he was unable to offer him the appointment as sub-postmaster Stockton Brook. Mr Malik claims this withdrawal was on racial grounds. That is an issue which has not yet been addressed because the Industrial Tribunal decided on a preliminary issue that the provision in the Race Relations Act 1976 ("the 1976 Act") upon which Mr Malik relied, namely s.12 did not apply in connection with the process of appointments to sub-postmasterships so that Mr Malik's application must necessarily fail.It was not contended that if Mr Malik had been appointed sub-postmaster he would thereby have become an employee of Post Office Counters. That was because it was held in Tanna v. Post Office [1981] I.C.R.374 that appointment as a sub-postmaster constituted a contract for services and not a contract of service. That was not challenged on Mr Malik's behalf and from this it followed that s.4 of the 1976 Act did not apply in relation to Mr Malik's application to Post Office Counters Ltd.S.12 of the 1976 Act reads as follows so far as relevant:"(1) It is unlawful for an authority or body which can confer an authorisation or qualification which is needed for, or facilitates, engagement in a particular profession or trade to discriminate against a person . . . . (b) by refusing or deliberately omitting to grant his application for it." (scil. the authorisation or qualification)

(2) In this section -

(a) "authorisation or qualification" includes recognition, registration, enrolment, approval and certification . . . . . ."

Further definitions are contained in s.78(1) of the 1976 Act

"profession" includes any vocation or occupation

"trade" includes any business

It was accepted on behalf of Mr Malik that there is no general prohibition in the 1976 Act against discrimination in relation to the making of a contract for services as there is in relation to contracts of service and it was thus not contended that s.12 of the 1976 Act was wide enough to embrace all grants of contracts of services. What was relied upon to differentiate the present case from the generality of contracts for services was the claim that it is a criminal offence to set up a post office business without entering into an agreement with Post Office Counters Ltd. It was made clear that this submission was based on the legislation which confers to an extent examined below an exclusive privilege upon the Post Office and not on the much wider proposition that Post Office Counters Ltd's agreement would be needed to set up a post office since carrying on such an activity without such agreement would clearly constitute passing off and a civil wrong. The latter line of argument would apply to the generality of appointments as agents to conduct trades or businesses and would it was recognised be far too wide to be relevant in connection with s.12 of the 1976 Act.The statutory position regarding the exclusive privilege of the Post Office emerged in argument as follows. The British Telecommunications Act 1981 , ("the 1981 Act") s.66, so far as relevant, reads as follows:
"(1) Subject to the following provisions of this Part, the Post Office shall have throughout the United Kingdom the exclusive privilege of conveying letters from one place to another and of performing all the incidental services of receiving collecting and delivering letters

(2) Any person who-

(a) does any act or performs any service, which infringes the exclusive privilege conferred on the Post Office by subsection (1); or(b) causes to be conveyed, or tenders or delivers in order to be conveyed, any letter by any means which infringes that privilege,

shall be guilty of an offence."

S.67(1) of the same Act enumerates a number of classes of acts which are declared not to infringe the privilege conferred by s.66(1). The relevant paragraph is (h) which taken in conjunction with the opening words of the subsection reads:"The privilege conferred on the Post Office by section 66(1) is not infringed by (h) the conveyance and delivery to the Post Office of pre-paid letters for conveyance and delivery by the Post Office to the addressees and the collection of letters for that purpose".The Post Office is given powers to redistribute its property and rights among its wholly owned subsidiaries by s.60 of the 1981 Act. Subsection (1) includes the following"(1) . . . the Post Office may make schemes . . . . .(a) for the reorganisation . . . of any of its wholly owned subsidiaries;(b) for the transfer between the Post Office and any such subsidiary . . . . of any specified property, rights or liabilities comprised in a specified part of the transferor's undertaking".

Subsection (3) includes

". . . .a scheme under subsection (1)(b) which transfers to a subsidiary property, rights and liabilities comprised in a part of the transferor's undertaking concerned with the provision of services which by virtue of the provisions of this Part, the Post Office has the exclusive privilege of providing may provide that such enactments relating to the provision of those services as may be specified in the scheme shall apply in relation to the subsidiary . . . as they apply in relation to the Post Office".The Post Office is established under the Post Office Act , 1969, which is to be construed as one with Part II of the 1981 Act which includes ss.60, 66 and 67 quoted above from that Act, and among the numerous powers conferred upon it power is given by s.7(2)(e)
"to enter into and carry out agreements with any person for the carrying on by him, whether as its agent or otherwise, of any of the activities which itself may carry on . . . ."
Post Office Counters Ltd is a wholly owned subsidiary of the Post Office. The Post Office Counters Scheme 1987 is a scheme made under s.60 of the 1981 Act and it provides for what is therein defined as "the Transferred Business" to be transferred from the Post Office to Post Office Counters Ltd. The "Transferred Business" is defined in the following terms:
"all the property, rights and liabilities of the Post Office comprised in the business carried on by the Post Office whether as principal or agent in such parts of post offices as are open to the public and at sub post offices by the Post Office's duly appointed agents on its behalf, immediately prior to the date of the coming into force of the Scheme . . . ."
The latter date was 1st October 1987.It is clear that the exclusive privilege conferred upon the Post Office by s.66(1) of the 1981 Act is not transferred by the Post Office Counters Scheme 1987, since nothing to that effect is specified in the Post Office Counters Scheme. We were informed that, with small exceptions, the activities of sub-post offices in connection with the letter post fell within the exception created by s.67(1)(h) of the 1981 Act. Whether that is so or not is not in our view material to our decision, which is only concerned with Post Office Counters Ltd and its claimed status as a body which can confer a relevant authorisation or qualification within s.12 of the 1976 Act.The case for Mr Malik was primarily argued before us on the basis that a grant of an appointment by Post Office Counters Ltd to an individual sub-postmaster amounted to a grant by a certifying body of an authorisation within the meaning of s.12 of the 1976 because of the need for statutory authority to conduct a sub-postmaster's business. That submission in our view fails because Post Office Counters Ltd, as opposed to the Post Office, does not enjoy any exclusive privilege. The only potentially relevant exclusive privilege is that of the Post Office but that is irrelevant because the only authorisation that Post Office Counters Ltd can possibly be conferring by appointing an individual to be a sub-postmaster is an authorisation to exercise a right or enjoy a privilege exercised or enjoyed by Post Office Counters Ltd, and it has no such statutory privilege.We were referred to British Judo Association v. Petty [1981] I.R.L.R.484 in which this Tribunal rejected a submission that the parallel provision to s.12 of the 1976 Act, that is to say s.13 of the Sex Discrimination Act 1975, should be given a narrow construction. The particular issue in Petty's case in relation to which that submission was made, that is to say whether a tribunal should consider the purpose of a certifying body in issuing a certificate in deciding whether it facilitated engagement in a trade or profession, rather than the factual question whether the issue of the certificate did facilitate that engagement, is not one which arises in the case before us.But as a general proposition we would certainly accept that the provisions of s.12 of the 1976 Act should not be narrowly construed so as to produce a less wide ambit than the natural meaning of the words. However this does not advance Mr Malik's case as put before us because it was accepted that s.12 did not apply to all contracts for a contract of services and the qualification relied upon, namely that it should be treated as applying where the appointment in question confers an exclusive right under the law to practise the profession or ply the trade, is one which is put forward on Mr Malik's behalf as a proper inference. It is certainly not there on the face of the section. There is therefore no question of narrowly construing the section in rejecting the argument advanced but rather of declining to read in what is suggested should be implied.Before the Industrial Tribunal, the case for Mr Malik was more broadly put, namely on the basis that the word "authorisation" in s.12 of the 1976 Act was wide enough to cover the simple acceptance or rejection of the applicant for appointment as a sub-postmaster, although some mention of the Post Office monopoly was made. That broad argument the Industrial Tribunal rejected on the basis that s.12 was only intended to, and did, only operate against such authorities or bodies which confer a general licence or qualification to work in a particular trade, profession or business. It expressed itself as unable to accept that the word "authorisation" could be so widely interpreted as to cover the grant or withdrawal of a permission or contract to act on behalf of or in a business undertaking. The arguments in favour of the rejection of such a wide submission were recognised before us on behalf of Mr Malik and it was for that reason that the argument based on the Post Office's exclusive privilege was advanced. But for the reasons already given we are unable to accept it in relation to Post Office Counters Ltd.As an alternative to the argument based on the statutory exclusive privilege, it was submitted to us for Mr Malik that there was a de facto monopoly in a sub-post office business in that a substantial amount of the business transacted in sub-post offices can only be transacted with the consent of Post Office Counters Ltd or of the Post Office and that for that reason an appointment by Post Office Counters Ltd to a sub-postmastership amounted to an authorisation for the purposes of s.12 of the 1976 Act since without such an appointment it was not possible to trade as a sub-postmaster. There was no evidence taken in the Industrial Tribunal. That was on the footing that the facts were not in dispute but the extent to which the activities in a sub-post office require the consent or licence of either Post Office Counters Ltd or the Post Office is neither established in evidence nor a matter of agreement. It was agreed that as regards quite numerous activities such as selling stamps there was no exclusive privilege. The extent of a de facto monopoly or its equivalent was not explored before the Industrial Tribunal. In these circumstances it would not in our view be right for this Tribunal, which has no independent fact-finding jurisdiction, to base its conclusions on any claimed de facto rather than statutory exclusive privilege or monopoly. We therefore are unable to give effect to that alternative argument. We would note in passing that there would in our view be formidable difficulties of definition of the boundaries of any de facto monopoly and that this consideration would militate very strongly against the conclusion that Parliament intended a contract for services entered into by a body or authority to be within s.12 of the 1976 Act if it had a de facto monopoly in a particular trade or profession but not if it did not.Two further authorities besides British Judo Association v. Petty , supra, were cited to us. They were R.v. Immigration Appeal Tribunal and the Department of Employment , ex parte Bernstein [1987] Imm.A.R.182 and R. v. Department of Health, ex parte Ghandi [1991] I.R.L.R.431 . Neither seems to us to assist Mr Malik's case. In ex parte Bernstein it was held by Taylor J. (inter alia) that the Department of Employment in refusing a work permit did not come within s.13 of the Sex Discrimination Act, 1975, the parallel enactment to s.12 of the 1976 Act. Taylor J. said this at p.187
"In my judgment the words of s.13(1) do not apply to the Department of Employment in the context of this case. They are aimed at professional bodies which grant a qualification for practising, or other bodies granting licences, registration, authorisation or qualification to follow a particular trade or calling. Apart from the plain wording of the section, its position in a group of sections from 11 to 16 in Part II of the Act supports this view. That group of sections is headed "Discrimination by other bodies" (that is to say, bodies other than employers). Section 11 relates to partnerships, section 12 to trade unions, section 14 to vocational training bodies, section 15 to employment agencies and section 16 to the Manpower Services Commission and other employment agencies. Finally, I think the phrase "particular profession or trade" shows that section 13(1) is not concerned with the grant or refusal at government level of a permit to work generally. Accordingly, I dismiss the argument under section 13(1) against the Department of Employment."
No doubt Taylor J. was there seeking to describe, rather than define precisely, the ambit of the section but we respectfully adopt that description. Also the precise point based on the use of "particular" in the phrase "particular profession or trade" does not arise here. The case before us goes to the other extreme because the rejection of Mr Malik for appointment as a sub-postmaster in a particular sub-postoffice in premises which he was proposing to buy as his own did not in terms extend elsewhere. No doubt it could be predicated that if Mr Malik's references were not regarded as satisfactory for appointment in Stockton Brook they might be regarded as defective in relation to an appointment elsewhere. So that the particularity of the rejection may well not be decisive. We do however take the view that Post Office Counters Ltd in deciding whether or not to appoint an individual as a sub-postmaster is not performing a function within the contemplation or the wording of s.12 of the 1976 Act. The function of granting an authorisation or qualification which is needed for or facilitates engagement in a particular profession or trade is an essentially distinct function from the entry into the appointment of an agent to carry on part of a trade even if the appointing body is the only person carrying on that particular trade. The decision in ex parte Bernstein is at least consistent with that view.The other authority to which we were referred, ex parte Ghandi , dealt with s.12 of the 1976 Act although the section was not directly applicable because of the existence of a right to appeal to the Secretary of State under National Health Services Regulations which under s.54(2) of the 1976 Act excluded complaints to an Industrial Tribunal. The application was for judicial review and involved a consideration of the functions of two committees, a Medical Practices Committee and a Family Practitioner Committee. The former had a power of including a doctor in the medical list for a locality on the reference to it by the Family Practitioner Committee of an application in that behalf of a medical practitioner and it was conceded that in so doing the Medical Practices Committee was acting as a qualifying body to which s.12 of the 1976 Act applied. See para 18 at p.434. The decision is of very limited assistance in the present case not only because it went on a concession but more significantly because it is evident that the Medical Practices Committee had a separate statutory power and duty of selection among medical practitioners of those who could be placed on the Family Practitioner Committee's list of medical practitioners who undertook to provide general medical services. The Medical Practices Committee therefore constituted a filter through which medical practitioners had to pass before inclusion on the relevant list. That renders the concession that it was within the ambit of s.12 quite comprehensible and by the same token renders the case of little or no direct help in the present case. Mr Griffith Jones on behalf of Post Office Counters Ltd did accept that the concession made in the Ghandi case made it difficult for him to submit that simply because Mr Malik was able to set up elsewhere as a sub-postmaster it necessarily followed that s.12 of the 1976 Act did not apply and he did not press any such submission.For these reasons we derive little assistance from the authorities cited to us save for the description by Taylor J. of the purpose of s.12 of the 1976 Act in ex parte Bernstein . We hold that this appeal fails, first, because we find there is no relevant statutory exclusive privilege or monopoly right in Post Office Counters Ltd as claimed on behalf of Mr Malik, secondly because there is no satisfactory evidence of a de facto exclusive privilege or monopoly right and, thirdly, because we do not consider that Post Office Counters Ltd's activities in appointment of sub-postmasters amount to the exercise of a function of conferring an authorisation or qualification which is needed for or facilitates engagement in a particular profession or trade so as to come within the ambit of s.12 of the 1976 Act.