Barclays Bank Plc v Young [1993] UKEAT 318_91_2307

EAT
Barclays Bank Plc v Young
[1993] UKEAT 318_91_2307 · 1993-07-23
MR JUSTICE KNOX: Barclays Bank plc ("the Bank") appeals the unanimous decision of the Industrial Tribunal sitting at London South on 3 April 1991. The decision was sent to the parties on 3 May 1991 and was that the Bank discriminated against Mrs P M Young, the applicant below and the respondent before us, contrary to Section 1(1)(b) of the Sex Discrimination Act , 1975, ("the 1975 Act") and that she suffered a detriment contrary to Section 6(2)(b) of the 1975 Act. These provisions read as follows:
"S.1(1) A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if- (a)....... (b)he applies to her a requirement or condition which applies or would apply equally to a man but- (i)which is such that the proportion of women who can comply with it is considerably smaller than the proportion of men who can comply with it, and
(ii)which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied, and

(iii) which is to her detriment because she cannot comply with it."

"S.6(2) It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain to discriminate against her- (a)...... (b)by dismissing her, or subjecting her to any other detriment."
The primary facts are not in significant dispute. The unlawful discrimination found arose from the interplay of two schemes operated by the Bank for its employees. The first called Career Break made provision for time to be taken off by employees to look after young children. Two options were made available on a gender neutral basis although the take up was exclusively by female, rather than male, employees. The first option was for a complete break of two years during which the employee would have resigned but would be taken back into his or her previous position after the two years with continuity of service. The second option was to work part-time for two years. The Industrial Tribunal quoted the relevant part of the scheme as follows:
"Staff on the career break scheme who work part-time will have continuous employment and there will be a short-term amendment of their contracted hours of work. Some benefits will be retained in full and other will be calculated on a pro rata basis according to the hours worked."
Salary in particular was dealt with on a pro rata basis. After the two year part-time work there was an obligation to return to full time employment. Up to September 1989, 125 women and no men, and up to July 1990, 211 women and no men, had opted for the part-time option.The other scheme of the Bank with which Mrs Young became involved was a replacement of a closely similar earlier scheme and in its final revised form was a later introduction than the Career Break scheme mentioned above and was the product of agreement, after negotiations with the Union B.I.F.U., regarding the problems of relocation. The relevant provisions of this Agreement entered into on 13 November 1989, were as follows:

" STAFF REQUIRED TO RELOCATE

All Staff will be given 6 months notice of the need to move.............Transfer will be obligatory and in accordance with the terms and allowances shown in the Appendix attached

(a)Staff not willing to relocate will

-be required to leave the employment of the Board with a deferred pension or such equivalent alternatives provided in the terms of the appropriate Pension Fund.-be eligible for a taxable ex gratia bonus provided they stay with the department to the date of it's (sic) relocation or until prior release at a date convenient to the Bank and give the Bank three months notice of their intention not to relocate ......... The ex gratia bonus will be calculated on the number of weeks pay ... per completed year of service in accordance with the following table

YEARS OF SERVICE AGE AT DATE OF LEAVING EMPLOYMENT OF THE BANK

Less than 30 30-40 41 and over

1-5 11/2 weeks 2 weeks 21/2 weeks6-10 2 weeks 3 weeks 31/2 weeks11 and over 3 weeks 4 weeks 41/2 weeks

Minimum payout 13 weeks

Maximum payout 52 weeks

Example

Age 26 with 8 years service

5 at 1 1 / 2 = 7 1 / 23 at 2 = 6 = 13 1 / 2 weeks' pay"It is in relation to the calculation of that bonus that the claim by Mrs Young of indirect discrimination arises.It will be seen that the formula is a relatively simple one with a multiplicand defined as "weeks pay" and multiplier ascertained in accordance with a double sliding scale, additional weighting being given to older rather than younger employees and also to employees with long service rather than short service. So far as the multiplicand "weeks pay" was concerned nothing was stated in terms regarding part-time staff nor, obviously, regarding temporarily part-time staff on Career Break such as Mrs Young proved to be.Mrs Young had a long and successful career with the Bank. She was born on 15 July 1954 and joined the Bank as a clerical officer on 6 November 1972 when she was 18. This was at the bottom of the ladder. By the time she left on 17 July 1990 after 17 1 / 2 years service she had risen to be a Senior Market Research Manager. In the meanwhile she had had two children. The first was born in 1985 when she took maternity leave and returned to work. The second child was born in June 1989 and this time she availed herself of the Career Break scheme and gave notice on 8 February 1989 of her desire to do so under the part-time option. She was accepted subject to the fact that her department at the Bank was moving to Coventry in approximately 12 months time. As a full time member of staff Mrs Young's contract of employment contained a mobility clause requiring her to relocate if her department moved. Part-time staff did not have such a mobility clause. Mrs Young was alert at an early stage to the problem which her part-time status under the Career Break scheme would give rise to in relation to an ex gratia bonus under the scheme which preceded the relocation scheme quoted above which, as already mentioned, was only agreed in November 1989 and she specifically raised the question in an internal electronic mail message dated 28 February 1989, whether her ex gratia bonus, if she was not willing to relocate, would be calculated on a full week equivalent or would it be a multiple of her 3 day week salary, saying that she hoped it would not be the latter as that implied that her 16+ years of full time service with the Bank was worth nothing. The answer was the one she hoped she would not get, namely that the bonus would be calculated on a part-time basis since she would be on part-time work and it was pointed out that had she chosen the other option of a two year retirement there would have been no relocation bonus payable at all. Mrs Young repeated her objections to this and went on maternity leave on 13 March 1989. After the baby was born, the Bank, on 14 July 1989, confirmed the details of Mrs Young's Career Break to commence in December 1989 when her maternity leave ended. At the same time she was warned that she was among the key personnel whom the Bank would require to relocate to Coventry during the next year and that the requirement to do so would occur while she participated in her career break, and thus her taxable ex gratia bonus if she stayed in service until the relocation date would be reduced to reflect her working hours in the 6 months prior to relocation. Mrs Young was told by letter dated 14 November 1989 that the actual relocation move was provisionally agreed to take place 6/7th July 1990 and that the relocation agreement quoted above had been reached between the Bank and staff unions.On 27 December 1989, Mrs Young started part-time work on a 3 day week basis and on 12 April 1990 she gave three months notice that it was not her intention to relocate. The arguments regarding the basis for calculating the ex gratia bonus continued throughout with the Bank and Mrs Young maintaining their respective positions. On 6 June 1990, Mrs Young gave four weeks' notice of resignation and she left accordingly having worked up to the relocation date and therefore qualified for the relocation ex gratia bonus.She qualified for the maximum multiplier of 52 weeks. It would appear this was on the basis that she was between 30 and 40 years of age on leaving and therefore entitled to 5 years at 2 weeks, 5 years at 3 weeks and 7 years at 4 weeks under the sliding scale mentioned above, making a total of 53 weeks reduced to the 52 week maximum. The multiplier for calculating her bonus was therefore 52 and no problem has ever arisen with regard to that aspect of the formula. The dispute arises regarding the multiplicand which was her part-time salary during the six months relocation notice period. Her full time salary including allowances was £32,266 per annum but this was scaled down pro rata to reflect her hours of part-time work to £19,422 which was the bonus she received. No issue arises as to the calculation of the scaling down to reflect part-time working. The issue is solely one of principle whether the application of a scaled down multiplicand to reflect part-time working constitutes an unlawful indirect discrimination within S.6(2)(b) of the 1975 Act.The Industrial Tribunal recorded that what has been referred to above as an ex gratia bonus was in the course of correspondence and negotiating variously called a loyalty bonus an enhanced payment and a relocation bonus. The precise terminology does not seem to us to signify greatly. What is more relevant is that it was an ex gratia payment and that its payment was conditional upon the employee working the whole of the relocation notice period down to the date of relocation. The Industrial Tribunal's own reasoning after setting out the parties' contentions at some length was shortly stated in the following terms:
"10 The bonus undoubtedly was given to staff in order to persuade them to stay until the date of relocation but we are quite satisfied that it was not enhanced pay for that period. It was based on experience, age and service and we are satisfied that the number of women who could receive a bonus based on full-time service is such that the proportion who could comply with that would be very much smaller than men. So on that ground we are satisfied there has been discrimination.
11. If we found discrimination then Mr Griffiths-Jones submitted on behalf of the respondents that it was justified and he in effect relied on the same submissions as he did for saying that it was not discrimination. It was justified on the grounds that people had to be persuaded to remain to keep the bank running smoothly and that it was there regardless of the sex. Again we cannot see that a bonus to be based purely on the last six months' working week is justifiable because as we stated earlier it is not just that period being considered in calculating the payment to be made to an individual, it is the quality of the employee during that time. That quality and the value to the respondents must inevitably be based on their abilities, the length of service and their age. Therefore the submission that it is justified also fails.12. There can be no doubt that Mrs Young has suffered a detriment in that on any showing she has lost a gross sum of £12,843.75, unless it should be that the last six months should be calculated at a lower rate."The critical factor in deciding this case in our view is the decision to what period of service the bonus is to be attributed. If it is properly to be attributed to the six months notice period up to relocation then Mrs Young's case must fail, because it was not contended on her behalf that there was any unjustifiable discrimination in paying part-time staff a pro rata payment in wages and the same must follow in relation to a bonus in respect of that service. If on the other hand the payment is properly attributed to the whole of the recipient's service, justification based on the amount of work done in the last six months is clearly very much more difficult, if not impossible, to establish.The Industrial Tribunal's decision on this issue seems to us ambiguous. In paragraph 10 quoted above there is a specific finding that the payment "was not enhanced pay for the period" meaning the notice period of six months. That suggests that the relevant period was some other period, presumably the whole career. But that appears to be contradicted by para 11 where one finds in dealing with the justification issue "we cannot see that a bonus to be based purelyon the last six months' working week is justifiable because..... it is not just that period being considered incalculating the payment to be made to an individual, it is the quality of the employee during that time." That last expression must mean during the six months notice period and strongly suggests that it is to that period that the payment is attributable but that justification fails to be shown because insufficient, or perhaps no, weight is given to the employee's quality. If it was the latter, it would be plainly wrong because it ignores the double weighting for age and experience in the multiplier and it ignores the fact that the weeks pay, the multiplicand, will also inevitably be affected by the employee's age and experience. It would be demonstrably untrue to say that no weight was given to age and experience.The process of analysis of the bonus by the Industrial Tribunal is firmly based by it upon the multiplier in the calculation of the bonus. It is the multiplier that has the two weighting factors in favour of age at leaving and length of service. This reasoning has two quite remarkable consequences. First, that there is a finding of indirect discrimination in the multiplicand used to calculate the bonus, that is to say years pay on a part-time, as opposed to whole-time, rate of pay, because of the way in which the multiplier, not the multiplicand, is defined. Secondly, it would seem to follow that if the Bank had chosen a fixed multiplier, say for example thirty, instead of a weighted sliding scale according to age and length of service, the decision would have had to be different because it could not then have been said that it was not just the last six months service that was being considered in calculating the payment to be made to the individual. The only period involved in the calculation on that basis would have been the last six months service.There is, moreover, a considerable degree of artificiality in attributing a period in respect of which an ex gratia bonus is payable on any basis other that that stated by the person making the ex gratia payment, assuming the statement to be honestly made. It was very properly conceded by Miss McNeill both that the bonus was an ex gratia payment and that the purpose for which the Bank made it was as stated in evidence on its behalf, and not challenged in cross-examination, that is to say, to persuade staff to stay until the date of relocation and to reward them for the work they did during this period, i.e. the period between notice of relocation and actual relocation. That witness also said that it was accepted that staff with greater service and greater age should get a greater payment as they gave greater service to the Bank. That later evidence is consistent with the choice of multiplier with its weighted sliding scale in favour of age and length of service. The Industrial Tribunal accepted this unchallenged evidence in its finding that the bonus undoubtedly was given to staff in order to persuade them to stay until the date of relocation. No reliance was placed in argument before us on any influence of Mrs Young's union in the negotiations leading up to the agreement in November 1989 regarding the relocation bonus and its calculation. No doubt this was because the union's attitude was that because of the tax implications it wished the payment to be a redundancy payment, which, as the Industrial Tribunal observed, the Bank very properly would not agree to because it was not a situation where there was a redundancy. There was, therefore, no finding of an effective union input into the calculation of the bonus.The identification by the Industrial Tribunal of the precise requirement or condition involved is not made entirely clear in the decision. Paragraph 2 of the decision includes the sentence:
"What has been put before us on behalf of the applicant is that by reason of the terms of the scheme....... which provided a bonus if an employee did not accept redeployment, that (sic) there has been discrimination because that was a condition which the majority of women would find more difficult to comply with than men."
More light is shed by implication in the passage already quoted from the Industrial Tribunal's reasoning where it was said that the number of women who could receive a bonus based on full-time service was such that the proportion who could comply would be very much smaller than men. We take it that the condition in question was one attached to entitlement to the maximum relocation bonus, namely that there should have been full time and not part-time working during the relocation notice period. By the same token - we do not accept Mr Griffith-Jones' submission that no requirement or condition was involved here. We do not derive assistance from the passage in Hirst LJ's dictum in Reg. v Secretary of State for Employment [1993] ICR 251 at 288 when he accepted a submission that:
"...... a practice could only be assumed to have an adverse disproportionate impact on part-time workers if it was a precondition for acquiring a particular benefit that a worker was in full-time employment"
saying:
"This particular pay practice lays down precisely identical rules for both full-time and part-time workers, and there is no condition which part-timers, unlike full-timers, are unable to meet."
There are, as Miss McNeill pointed out, very significant differences between the issues in that decision and those in the appeal before us. In the Reg. v Secretary of State for Employment there was an issue regarding the statutory provisions in relation to redundancy and their impact upon full-time and part-time employees. In the case before us the issue concerns differences in treatment between full-time employees and a category of full-time employees choosing to work part-time on a two year temporary basis.Equally, we do not accept Mr Griffith-Jones' submission that the Industrial Tribunal failed to consider the question whether Mrs Young could have complied with the condition by working full-time. This was indeed not a point dealt with by the Industrial Tribunal but that, we are satisfied, was because the point was not put to Mrs Young when she gave evidence. We are satisfied it would not be right to allow it to be raised at this stage since it raises a factual issue not properly covered below.Miss McNeill submitted that both the issue whether there was indirect discrimination and the issue whether, if so, it could be justified, were issues of fact for the Industrial Tribunal upon which this Tribunal could only interfere if perversity was established. In her submission the nature of the payment had to be objectively analysed and the only question was whether the payment was, as the Bank contended, in the nature of enhanced pay for the six months notice period or, as Mrs Young contended, a bonus that was paid to an employee who worked on until relocation and was intended to reflect not only the work done during that period but the employee's loyalty over the years and her quality and value to the Bank. The reference to what was intended in that submission must presumably be to the Bank's intention which the Industrial Tribunal has objectively to ascertain, rather than by the evidence on behalf of the Bank.In our view the decision of the Industrial Tribunal on the issue of justification should be reversed, primarily because there was no evidence upon which a decision could properly be reached that the bonus payment was not a payment attributable to the six months notice period. For the reasons already given we are not clear whether the Industrial Tribunal did conclude that the payment was attributable to that period or to the whole of Mrs Young's service but, however that may be, the only connection with any period of service other than the last six months of her service was in the multiplier used to calculate the payment, and that was no more than a mode of calculation of what the Bank considered to be the appropriate manner of recognising the contribution made by the employee in staying on until relocation. The Bank's intention was the relevant intention as is implicitly recognised in Miss McNeill's argument and the only evidence on that issue was that the Bank's purpose was to persuade staff to stay on until the date of relocation. The fact that the inducement that was used to achieve that end was based on a calculation which took into account past service and age on leaving is not, in our view, capable of converting the payment in question from an inducement to stay until relocation into a different form of payment in the nature of a bonus based on total service. It is obviously unfortunate for Mrs Young that her choice whether or not to relocate had to be made at a time when she only had part-time service during the relocation working period but the issue is not how much would it be fair in all the circumstances for Mrs Young to receive given her long and successful career, but whether the Bank has been guilty of unlawful indirect discrimination in operating its relocation scheme.We do not think it was and allow this appeal.