Cannon v Barnsley Metropolitan Borough Council [1992] UKEAT 406_90_1706

EAT
Cannon v Barnsley Metropolitan Borough Council
[1992] UKEAT 406_90_1706 · 1992-06-17
MR JUSTICE KNOX: These are proceedings which were initiated by the late Mrs Cannon who was the Applicant before the Industrial Tribunal at Sheffield that sat on Wednesday 16th May 1990 and decided unanimously that Mrs Cannon's Originating Application was dismissed for want of jurisdiction. Mrs Cannon, sadly, has died in the intervening period and the proceedings are continued by her personal representative, who by coincidence, in fact, conducted the hearing before the Industrial Tribunal.The first thing to do is to identify what the application made by Mrs Cannon was about, and for. Her Originating Application was dated the 27th February and presented on the 28th February 1990. In the first box which requires the Applicant to say what type of complaint she wants the tribunal to decide there was inserted "Sex Discrimination re-Redundancy Payment". In the box numbered ten which requires full details of the complaint, Mrs Cannon, as befitted a headmistress, stated her case with considerable clarity. She said this:
"I make a late application to the Industrial Tribunal and ask that they will consider my claim even though it is so late. I was made redundant on the 31.8.85 two months before my sixtieth birthday. My employers were Barnsley Metropolitan Borough Council - Education Department. Redundancy payment was calculated on twenty years' service at £146 per week i.e. £4,408.00.
This amount was then reduced by £3,673.33 because it was stated that each complete month worked in the last year before State Retirement Age reduced redundancy payment by 1/12th.I received a payment of £734.67.I queried this with my employers but was told that they were allowed to do this because women could claim a State Retirement Pension at sixty whereas men had to be sixty-five. My male colleagues were paid in full.Contracts of employment in the teaching profession state the same terms for retirement for men and women and I had expected to be employed until I was sixty-five. I had to rely on the information being given by the Local Authority as correct after I had queried their deduction.I was unaware of the EEC directions on equal treatment and find this area of law very complicated. I have in the last week heard of the case of the Hammersmith and Queen Charlotte Special HA v. Cato [1988] ICR 132.I appeal to the Tribunal on the grounds of sex discrimination because my redundancy payment was reduced contrary to EEC directives and my employer Barnsley Metropolitan Borough Council was adamant that because I am a woman they could take back £3,673.33. Please consider allowing my late claim to the Tribunal."So far as domestic law was concerned there is no doubt that the deduction was correctly calculated in the light of the redundancy of Mrs Cannon, which took effect on the 31st August 1985, which is the relevant date, and under Schedule IV, paragraph 4 of the 1978 Employment Protection (Consolidation) Act, which is incorporated by Section 81(1) of that Act, the deduction that fell to be made was correctly calculated, and there is no issue on the mathematics. There has been a rounding off of 2/3rds of a pound to 67 pence, but no one is likely to complain of that.So far as domestic law is concerned the law was changed by Section 16(2) of the Employment Act 1989, which Section was made operative on the 16th January 1990. That is pursuant to Section 30(3) of the Employment Act 1989 which nominates in a very long list of sections, Section 16 as coming into force at the end of two months, beginning with the day when the Act was passed. The date of the Royal Assent was the 16th November 1989 and that takes one to two months thereafter, the 16th January 1990. The transitional provisions contained in that Act, did not have the effect, so far as domestic law is concerned, of affecting Mrs Cannon's rights, since the Act for domestic purposes was not made retrospective. There is equally the clearest possible discrimination between the provisions for men and women in the Schedule IV, paragraph 4 of the Employment Protection (Consolidation) Act 1978, as originally enacted, in that the reductions in redundancy payments are operative, so far as women were concerned between the 59th and 60th birthdays, whereas under the 1978 Act the same regime they only applied to men between their 64th and 65th birthdays. It is that difference that has been prospectively removed from domestic law by the Employment Act 1989 Section 16.The Industrial Tribunal, having set out the facts, and accepting what Mrs Cannon said about her learning about the decision in Hammersmith & Queen Charlotte Special HA v. Cato then turned to deal with the several arguments that had been advanced before it. But it is, in our view, quite clear that the Originating Application that was made by Mrs Cannon relied on European Directives and not just on either the Sex Discrimination Act 1975 or the Employment Protection (Consolidation) Act 1978.The Industrial Tribunal first accepted a submission, made on behalf of the employing authority, that Mrs Cannon had to bring her case under domestic law and went on to say:
"The question we are asked is whether the provisions of European law in 1985 were to be applied overriding the provisions of domestic law at that time."
and the Industrial Tribunal expressed its view:
"We do not think they were. The legislature in 1989 took the matter in hand and rectified what had been seen to be an injustice."
That, in our view, is not a view which can now be sustained. In our judgment it is now clear, first of all that redundancy payments are to be treated as pay, since the decision in Barber v. Guardian Royal Exchange Group [1990] ICR 616 in the European Court of Justice. Secondly, that where there is legislation in a Member State which is discriminatory in a manner which is contrary to the requirements of Article 119 and of Directives made pursuant to the Treaty of Rome, and in particular, the Equal Treatment Directive and the Equal Pay Directive, there is a possibility of enforcement by a national of the state concerned, notwithstanding the absence of a right in the domestic legislation because European law on the subject takes precedence and is capable of conferring a right where the national law does not. We say a possibility because in relation to claims under Directives, as opposed to the direct claim under Article 119, it is clear that the direct right is only available against a Government emanation. That has been examined most lately in Foster v. British Gas plc [1991] ICR 463, where the House of Lords referred to the European Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty, the question, whether the British Gas Corporation at the material time was a body of such a type that the applicants were entitled in English Courts and Tribunals to rely directly upon the Directive. The Directive in question was 76/207/EEC, commonly called the "Equal Treatment Directive". The reply from the European Court of Justice in its ruling dated the 12th July 1990 is, so far as we are concerned, quoted in its relevant passage at page 467 of the report of the House of Lords decision in Foster v. British Gas plc . The European Court of Justice in its Ruling said this:"The court has accordingly held that provisions of a Directive could be relied on against tax authorities; [I pass over the authorities for that] local or regional authorities, Fratelli Costanzo S.p.A. v. Comune di Milano [1990] 3 CMLR 239 ,.....".Accordingly any difficulty that there might be in relation to the identity of the Respondent seems to us to disappear if there is a right under a relevant Directive for Mrs Cannon and her estate now to make the claim that was advanced.We are satisfied that the estate, as it is now, is thus entitled, because it seems to us clear that the provision for discriminatory treatment was an infringement of the Equal Pay Directive and of the Equal Treatment Directive, and that under both heads, as well incidentally, as Article 119, as to which reference could be made to McKechnie v. UBM Building Supplies (Southern) Ltd [1991] IRLR 283, there is in the circumstances of this case, of Mrs Cannon being employed by an emanation of the State, a right vested in her and now her estate.The Industrial Tribunal therefore, in our view, erred in holding that Mrs Cannon was restricted to the provisions of domestic law. They also erred, in our view, as has already appeared in the course of this judgment, in saying, as they did, that Mrs Cannon's claim was specifically brought under the Sex Discrimination Act 1975 which by Section 76(1) imposed a three month's time limit. There is jurisdiction to extend that time limit under subsection (5) of that Section if in all the circumstances of the case the tribunal considers that it is just and equitable to do so. This was not, as we have already indicated, a claim which was specifically brought under the Sex Discrimination Act 1975. On the contrary, Mrs Cannon, it seems to us, made it clear that she was relying on the Directives in advancing her claim. Accordingly, the further decision the Industrial Tribunal reached about not extending time because it was not just and equitable to do so is not, in terms, relevant to the situation that presents itself on our view of the case.The Industrial Tribunal also expressed the view that it was too late to ask to reopen the case now, expressing the view also that it would have been too late even in 1987 when the Hammersmith v. Cato case was decided.In our judgment, the Industrial Tribunal, for wholly explicable reasons, because the case in question had not been reported, approached this matter in the wrong way in connection with time limits. Where there is a right under the European law as opposed to domestic law, the principles applicable to the imposition of time limits have now been authoritatively stated in the European Court of Justice decision Emmott v. Minister for Social Welfare & Attorney General [1991] IRLR 387 . That was concerned with a different Directive, the Social Security Directive 79/7, but the principles laid down by the European Court of Justice seem to us to be of general application. There was an application made to the European Court of Justice for a preliminary ruling, whether the earlier ruling of the Court of Justice in a case called McDermot & Cotter v. Minister for Social Welfare & Attorney General reported at [1987] ECR 1453 was to be understood as meaning, that in a claim before a national court or tribunal made in purported reliance on Article 4 of the Directive in question, that is the Social Security Directive, by a married woman for equal treatment and for compensatory payments in respect of discrimination alleged to have been suffered by reason of the failure to apply to her the rules applicable to men in the same situation, it was contrary to the general principles of Community Law for the relevant authorities of a Member State to rely upon national procedural rules, in particular rules relating to time limits, in bringing claims in defence of that claim such as to restrict or refuse such compensation. In that case the Irish Government was relying on Mrs Emmott, the Applicant, being out of time under the Rules of the Superior Courts 1986, Order 84, Rule 21/1, which imposed a time limit for bringing applications by way of judicial review. There was a similar situation to that which obtained between the passing of the Equal Treatment Directive and the Equal Pay Directive on the one hand, and the passing of the Employment Act 1989 on the other hand, in that although there was a Directive in force there was not implemented the obligation placed on Member States to produce the required national legislation to comply with the relevant directive. The European Court of Justice, in that context of the Irish Government seeking to rely on the procedural time limits in respect of judicial review, held that in the absence of Community Rules on the subject, it is for the domestic legal system of each Member State to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which individuals derive from the direct effect of Community law, provided that such conditions are not less favourable than those relating to similar actions of a domestic nature, not framed so as to render virtually impossible the exercise of rights conferred by Community law. The laying down of reasonable time limits, which, if unobserved, bar proceedings, in principle satisfies those two conditions. However, a Directive imposes a binding obligation on each Member State to adopt all the measures necessary to ensure that it is fully effective. Member States are required to ensure the full application of Directives in a sufficiently clear and precise manner, so that where Directives are intended to create rights for individuals they can ascertain the full extent of those rights and where necessary rely on them before the national courts. So long as a Directive has not been properly transposed into national law individuals are unable to ascertain the full extent of their rights. That state of uncertainty subsists even after the Court has delivered a judgment finding that the Member State has not fulfilled its obligations under the Directive, and even if the Court has held that a particular provision of the Directive is sufficiently precise and unconditional to be relied upon before a national court. Only the proper transposition of the Directive will bring that state of uncertainty to an end and it is only upon that transposition that the legal certainty which must exist, if individuals are to be required to assert their rights is created. Therefore, Community law precludes the competent authorities of a Member State from relying, in proceedings brought against them by an individual before the national courts in order to protect rights directly conferred upon him by a Directive, on national procedural rules relating to time limits for bringing proceedings so long as that Member State has not properly transposed that Directive into its domestic legal system.If we apply those principles, as in our view, we are bound to do, one arrives at a solution of the problem for which this Tribunal sought, so far without success, for necessary domestic legislation to be introduced. I refer to Stevens & Others v. Bexley Health Authority [1989] ICR 224, where at page 227 Mr

Justice Wood said:

"Two matters of general importance appear from these two cases. The first is that time limitations for bringing claims based directly on Community law are at present left extremely vague."
I need not read what the second of the matters of general importance was because we are not concerned with it, but the judgment continues:
"It seems to us that consideration could well be given by those responsible . . . . . . . . . to the introduction of statutory provisions to provide time limitations to the bringing of claims based directly on Community law."
The situation as we see it is that there is no relevant provision in the national law setting out a particular time limit in respect of claims under European law, and that was what Mr Justice Wood was asking for to be introduced in the Stevens case. But it does not follow from that that any claim under European law can be made at any point of time however remote. That would be a truly intolerable situation. In principle English law is perfectly capable of evolving, if necessary by analogy to statutory or common law periods which are clearly laid down in terms of months and years, a time limit for the bringing of similar but sufficiently different claims for them not to fall within the strict letter of the statutory or common law limitation period. That has been done in the past in the field of equity, and in principle we see no reason why it should not be done in the field of the enforcement of European law rights. Accordingly, it would in principle, so far as we see, not be not an insuperably difficult task to take from the Employment Protection (Consolidation) Act the time limits which are there to be found, generally six months, but in exceptional circumstances one year, for the making of claims for redundancy payments, and if it was legitimate to start the period running from the date called in the legislation "the relevant date" and in this particular case the 31st August 1985, we have little doubt that it would be possible to apply by analogy, the statutory time limit which has been imposed for the bringing of redundancy payment claims. But it does seem to us that the decision in Emmott's case regulates the critical question which is, from what point of time does a time limit period run? Whereas it could be argued in principle that it should run either from the introduction of the relevant Directives or possibly from the making of the decisions that made it clear that claims such as this could be made under European law notwithstanding the absence of a right in English domestic law, the Emmott decision makes it clear that the state and its emanations are disabled from relying on any such running of time right down to the day when the failure of the state to comply with its obligations under the relevant Directive has been made good. By what must be a happy coincidence for Mrs Cannon and her estate, the period between the making good by Parliament in this Country of the discriminatory treatment as between men and women, in relation to reductions of redundancy payments, under paragraph 4 of Schedule IV to the 1978 Employment Protection Act, only occurred one month and twelve days before the Originating Application was presented, the two dates being the 16th January 1990, the introduction of the Employment Act provision aligning male and female employees in this respect, and the 28th February 1990, which was the day when the Originating Application was presented by Mrs Cannon. No system of law, we venture to think, certainly not ours, would have introduced a time limit shorter than one month and twelve days, and it therefore seems to us that for those reasons the application was not made out of time. Because the application itself was a sound one and because it was not made out of time it is, in our view, not only clear that the Industrial Tribunal's decision contains errors of law but also what the effect should have been of the application, which is that the claim to recover the payment that was deducted, correctly under domestic law, should succeed.We therefore substitute that decision, the amount being £3,673.33 pence, for the dismissal of Mrs Cannon's application.Finally, we should record that the only appearance before us, but it was a very helpful one, was by Mr Harris of the FRU on behalf of Mrs Cannon's estate and that the Metropolitan Borough Council was not in fact represented before us.