Manor Bakeries Ltd v Nazir [1996] UKEAT 628_95_0108

EAT
Manor Bakeries Ltd v Nazir
[1996] UKEAT 628_95_0108 · 1996-06-25

JUDGE HULL Q.C. :

This is an appeal to us by employers, Manor Bakeries Ltd, from a decision of the Industrial Tribunal sitting at Manchester on 21st March 1995 under the Chairmanship of Mr P J Russell. The tribunal held that the employers were in breach of Article 119 of the Treaty of Rome ["Equal Pay for Equal Work"] and ordered the employers to pay Ms Nazir, the applicant, £48.00.Ms Nazir, who is the respondent to the present appeal, was from 1976 until a short while ago employed by the appellants at their Wythenshawe bakery in Manchester. She lost her job very recently when the bakery closed. At all the times with which we are concerned, she was a chargehand. In 1994 she was an authorised shop steward and she was elected as one of three delegates to attend the annual conference of her trade union, the Bakers, Food & Allied Workers' Union, at Morecombe. This conference occupied four working days during a week in June.The appellants had a recognition agreement with the trade unions; this is copied at pages 13 to 55 of the documents bundle before us. This agreement must of course be read in the light of certain of the provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 . Under Section 168 of the Act, it is provided that an employer is to permit an employee of his who is an official of an independent trade union recognised by the employers to take time off during his working hours for the purpose of carrying out certain duties as such an official, or for the purpose of undergoing training relevant to carrying out certain of those duties. Under Section 169 the employer is to pay the employee "for the time taken off" . Under Section 170 an employer is to permit an employee who is a member of a recognised trade union to take time off for the purpose of taking part in any activities of the union. There is no provision in the Act for payment in respect of time off for "union activities" under Section 170 as opposed to "union duties" under Section 168.It is therefore not surprising to find that the recognition agreement makes separate provision for trade union duties and trade union activities. The material parts of the agreement begin at page 37 of the documents bundle. First there is provision for requests for time off for both duties and activities. Then there is provision for industrial relations duties (always at the place of work), domestic trade union duties (when it is agreed that they cannot reasonably be carried out outside working hours) and industrial training. Next there is provision for trade union activities ( "activities of the union as distinct from union duties" ), where "time off will be without pay except in special circumstances set out in paragraph (d)" .Paragraph (d) provides:
"Time off for a member of a union taking part in union activities shall not qualify for payment unless:- (i) In the case of a union representative the activity is also an understood part of his industrial relations duties. ...
(ii) The activity in question is requested, promoted or supported by the employer as being in the interests of the employer or in the joint interests of the employer and the union, or

(iii) The activity is shown in Appendix 1 as qualifying for payment"

In Appendix 1 the first item is "Unions Annual Conference. Restricted to officially elected delegates (with pay)" .Paragraph 6 of this part of the recognition agreement provides:
"Payments for Time Off (a) Where payment is permitted within this agreement for time off the payment shall be in respect of the hours worked by the employee's shift during his/her absence. (b) No payment shall be made in respect of time off where that time would have fallen on a rest day or holiday unless the day in question would normally have been worked."
Ms Nazir was a part-timer - she worked 4 1 / 2 hours on each of five days per week. One of her fellow delegates, Mr Ward, was also a part-timer. The third delegate, Mr Kennedy, was a full-time worker who worked nine hours per day.During the first four days of the conference each of the delegates attended. The Industrial Tribunal heard no evidence but was provided with an agreed statement of facts. They found that the following facts were relevant:
"(a) The applicant is employed as a part-time chargehand at the respondents bakery. She works from 8 am to 12.30 pm from Monday to Friday inclusive. It is common ground that a large majority of part-time workers employed by the respondent are female and that a large majority of its full time workers are male.
...(f) The conference took place from Sunday 4 June to Thursday 9 June 1994 and thus covered four days at which the delegates would normally have been working at the bakery. It is not known how many hours each delegate spent at the conference. However it is to be assumed that each of the three delegates spent the same amount of time at the conference. However because the applicant was a part time worker she was only paid on the basis of eighteen hours pay. However Mr Kennedy who was a full time worker was paid on the basis of 39 hours pay although he had only spent the same amount of time at the conference as the applicant. The third delegate, Mr Ward was also a part time worker and he also received pay in accordance with the collective agreement, namely in respect of the hours worked by his shift during his absence at the conference. It can be noted that the applicant as a female part time employee was treated in exactly the same way as Mr Ward, a male part time employee. However this is legally irrelevant in the light of the accepted evidence that the large majority of the respondents' part time workforce are female."The Industrial Tribunal then referred to Arbeiterwohlfahrt Der Stadt Berlin v Botel [1992] IRLR 423 , from which they cited at considerable length. We shall refer to that decision later in this judgment.The tribunal continued:
"6. Having regard to the agreed facts and to the relevant European Law as set out in the Botel decision the Tribunal is no doubt that the payments made by the respondent to those employees who attend their trade union conference falls within the concept of "pay" within the meaning of Article 119 of the Treaty. By paying less to part time workers who are predominantly female who attend such conferences than to full time workers who are predominantly male amounts to indirect discrimination of women employees by comparison with men contrary to Article 118 of the Treaty. Moreover, although in the skeleton argument of the respondent it is argued that such discrimination may be objectively justified on grounds unrelated to sex the respondent did not seek to purse such an argument before this tribunal with any force and we certainly can find no such objective justification. The respondent did, however, seek to persuade us that even if payments to attend the annual conference did amount to "pay" for the purpose of Article 119 the attendance at such conferences could not constitute "work" because the attendance by employees at such conferences had little or no benefit to the respondent. It was thus argued that there could be no breach of Article 119 in such circumstances. The tribunal was not persuaded by such an argument. If the attendance by employees at such conferences was really of no benefit to the respondent it is difficult to understand why the respondent was prepared to give paid leave to its employees to attend such conferences. Moreover, we consider that by employees attending at such conferences they were working in the broad sense because their activities were, to quote the Court in the Botel case, "encouraging the existence of a harmonious working relationship within and in general interest of the undertaking."
We would pause to say that we think that many trade unionists would be surprised to hear that the activities of their annual conference and the delegates attending it were "encouraging the existence of a harmonious working relationship within and in general interest of the undertaking [of the employers] " . That comment appears to be entirely unsupported by the agreed facts. The tribunal continued:
"7. The Tribunal had some sympathy for the respondent because it was under no legal compulsion to enter into the collective agreement whereby employees should be paid for attending the annual trade union conference. However although the respondent is to be congratulated for having the foresight to enter into such an agreement it is by law obliged to go one step further having entered into such an agreement because it must ensure equal treatment for male and female employees who are paid to attend such conferences. In that the respondent has failed to ensure equal treatment in the present case it is in breach of Article 119 of the EEC Treaty and we declare accordingly. ..."
The concept that employees were "paid to attend trade union conferences" seems to us not to be fully supported by the actual language of the recognition agreement. The agreement provides for time off for trade union duties and activities, but with regard to payment it is expressly provided "where payment is permitted within this agreement for time off the payment shall be in respect of the hours worked by the employees shift during his/her absence."Article 119 of the Treaty of Rome provides:
"Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.
For the purpose of this Article, "pay" means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer.Equal pay without discrimination based on sex means:(a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;(b) that pay for work at time rates shall be the same for the same job."It is therefore obvious that unless there is work, and pay for that work, Article 119 has no operation. It appears to us that the requirement for "work" is frequently overlooked, for the simple reason that employers are not in the habit of paying employees who are not doing any work. For similar common sense reasons, the word "pay" has been given a very wide meaning indeed, because employers frequently consider it in their interests to promote good will, enthusiasm and so on by giving bonuses, benefits in kind and indeed promises of benefits in the future. Nonetheless, it seems to us that in the present case we are obliged to enquire what the appellants were paying for, and in particular whether what Ms Nazir was engaged in can conceivably be described as "work" while she was attending the union annual conference.We were referred by Mr Mullins, who appeared for Ms Nazir, to a number of cases which illustrated the extremely wide application of Article 119. In Garland v British Rail Engineering Ltd [1982] ICR 420 , the employer operated a scheme whereby employees were given concessionary travel facilities for themselves and their families. After retirement, former employees enjoyed (but not by contractual right) a continuation of the travel facilities for themselves and, in the case of male employees only, the continuation of the facilities for their families. The appellant, a female clerical worker, complained to an Industrial Tribunal that, by implementing such a policy, the employer was discriminating against her on the ground of her sex. It was held by the European Court of Justice, on a reference from the House of Lords, that the provision by an employer (although by not virtue of contractual obligation) of special facilities for male employees after retirement, some of which female employees did not receive, was discrimination against former female employees within Article 119 of the EEC Treaty. In the course of their decision, the European Court said at page 434:
"5. It is important to note in this regard that in paragraph 6 of its judgment ... in Defrenne v Belgian State ... [1971] ECR 445 , 451, the court stated that the concept of pay contained in the second paragraph of Article 119 comprises any other consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer. ...
9. It follows from those considerations that rail facilities such as those referred to by the House of Lords fulfil the criteria enabling them to be treated as pay within the meaning of Article 119 of the EEC Treaty.10. The argument that the facilities are not related to a contractual obligation is immaterial. The legal nature of the facilities is not important for the purposes of the application of Article 119 provided that they are granted in respect of the employment.11. It follows where an employer (although not bound to do so by contract) provides special travel facilities for former male employees to enjoy after their retirement this constitutes discrimination within the meaning of Article 119 against former female employees who do not receive the same facilities. ..."We note that in that case the United Kingdom specifically submitted (at page 432A-B):
"The nature of the facility in question is such that neither its costs nor its value can be compared with the amount or value of the work done to earn it by male and female employees. It is true that the facility may be described as arising out of the workers employment and that without that employment it would not have been granted, but "once the benefit cannot be related to the work, the principle of Article 119 cannot be invoked". Furthermore, and in any event, such a facility provided after a worker has retired is not within Article 119 at all. That Article is meant to affect legal relationships only and is not intended to cover gratuitous gestures by the employer."
It is clear that that submission was rejected by the European Court and we therefore ask ourselves what the "work" was in respect of which the "pay" was held to be discriminatory. We have come to the conclusion that the answer is "the work provided by each individual employee throughout the time of his or her employment" . If that is the correct answer, then the question whether retired employees were doing "work" when they travelled around the country making use of the travel facilities provided by the employers would be thought to be not only absurd but irrelevant.Mr Mullins also referred us to Rinner-Kuhn v FWW Spezial-Gebaudereinigung GmBH & Co KG [1989] IRLR 493 , in which it was held that the continued payment of wages to a worker in the event of illness fell within the definition of pay within the meaning of Article 119. As a considerably smaller percentage of women than of men carried out the minimum number of hours required to be entitled to continued payment of wages in the event of incapacity due to illness, a provision such as the one in that case resulted in practice in discrimination between male and female workers and was, in principle, to be regarded as contrary to the objective pursued by Article 119. It seems obvious to us that employees suffering from illness were paid in respect of the work which they had previously done for the company in question.Mr Mullins referred us to Hammersmith and Queen Charlotte's Special Health Authority v Cato [1988] ICR 132 , where it was held that the word "pay" in Article 119 was to be given a wide and liberal interpretation and included a redundancy payment which was clearly a payment "in respect of her employment" ; and that, accordingly, the reduction in the applicant's redundancy payment (which would not have been made in the case of a man) amounted to unlawful discrimination contrary to Article 119. In the course of their decision, the Employment Appeal Tribunal observed that it was a misdirection to say that the word "pay" had to be pay received during employment. The word pay was to be given a wide and liberal interpretation and it was clear that the redundancy payment in question was encompassed by the word "pay" as it was undoubtedly in respect of her employment with her employer.In the light of those decisions, and even more on the basis of the plain wording of Article 119, we should have been disposed to say that it was perfectly plain that the pay which Ms Nazir received in respect of her attendance at the union's annual conference was not payment for her labours at the conference at all; the pay was paid in respect of her past and probably also her future work for the appellants. That distinction appears to us to be underlined by the statutory provisions to which we have referred, and by the wording of the recognition agreement itself. The attendance at the union conference was of course an "activity" and not a trade union duty at the work place; and both the Act of 1992 and the agreement make the distinction very plain. If we may for a moment refer to common sense considerations, the idea that Ms Nazir might have been working for the employers and being paid for that work while she was at the annual conference appears positively fanciful. The employers had of course no control whatever over the work done at the conference and the hours spent on that work. The delegates might attend conscientiously to their duties or might take a more relaxed approach. They might or might not attend all the sessions of the conference. They might legitimately conclude that some important topics of discussion could be more pleasantly and usefully pursued in the hotel bar or on the promenade. The distinction between work and pleasure on such occasions might be hard indeed to draw; general sociability and the cultivation of professional friendships are an important part of all such activities. We should have thought that so far from Ms Nazir being paid "to attend the conference" she was being "paid for time off" precisely in accordance with the recognition agreement; and that payment was "in respect of the hours worked by the employees shift during her absence" again in accordance with the agreement.We therefore have to look to see how the Industrial Tribunal reached a different conclusion. As we have said, they referred to the case Arbeiterwohlfahrt der Stadt Berlin v Botel [1992] IRLR 423 and made extensive citations from it. The important facts in that case, so far as they appear from the headnote, are that Mrs Botel was employed by the Employee Welfare Department of the City of Berlin as a home nurse. In 1985, she became President of the Staff Committee in the district in which she was employed. In 1989, she attended six trade union training courses, mainly concerned with labour law, company law and the organisation of Staff Committee meetings. In order to attend these courses, she was given leave by her employer under Article 37(2) of the German law on the organisation of undertakings (BVG). This provided that "members of the Staff Committee must be released from professional obligations without a reduction in salary if and in so far as, given the size and nature of the undertaking, it appears necessary for the proper performance of their duties" . Article 37(2) provided that it was applicable to "participation in training courses ... insofar as they provide skills and knowledge required for the work of the Staff Committee" .The relevant courses lasted longer than Mrs Botel's normal working hours. She was paid by the employer for her normal working hours, but was not paid for the free time which she devoted to the courses. Since the courses lasted less than 40 hours per week, the normal working hours of a full-time employee, full-time employees given leave to attend the courses received their normal salaries. If Mrs Botel had been a full-time employee, it was not disputed that she would have received additional payment.She brought proceedings claiming compensation and referred to Article 37(3) of the BVG. "As compensation for hours over and above the working hours devoted to the Staff Committee for purposes ancillary to the business of the undertaking, a member of a Staff Committee is entitled to a corresponding period of paid leave. ..."The Berlin court referred to the European Court the following question:
"Do Article 119 of the EEC Treaty and Council Directive 75/117/EEC ... on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women, preclude the application of a legal provision which compensates the members of a Staff Committee for the hours lost as a result of participation in training courses (allowing them to acquire the skills and knowledge required for their work on the Committee)(the principle of compensation for loss of salary ...), but which deprives members of the Staff Committee who are part-time employees and who must devote time over and above their own working hours to this training of compensation in the form of leave and/or pay in respect of this additional time devoted to the training up to limit of the full-time working hours applicable in the undertaking, although the proportion of women affected by this regulation is clearly higher than that of men?"
The European Court held that compensation in the form of paid leave or overtime pay for participation in training courses given by an employer to Staff Committee members in accordance with the statutory provisions fell within the concept of "pay" within the meaning of Article 119 of the Treaty. Although such compensation did not arise from the contract of employment, it was nevertheless paid by the employer by virtue of legislative provisions and by reason of the existence of an employment relationship with an employee. The part-time employees were treated differently since they received less by way of compensation from the employer than full-time employees. Since the part-timers were generally women, such a legislative provision gave rise to indirect discrimination in pay against women contrary to Article 119 and to the Directive.In the course of their judgment, the European Court said that the training courses provided knowledge and skills required for the work of Staff Committees within the meaning of Article 37(6), particularly in the fields of employment law and company law. By virtue of the provisions of Article 37, the members of a Staff Committee taking part in such courses must be excused from their professional duties by their employer without any reduction in salary being made. Under these provisions, the employer paid Mrs Botel for those working hours she had not completed as a result of her participation in courses up to the limit of her own working hours. As a consequence, Mrs Botel was not compensated in respect of those hours over and above her own working hours which were devoted to training.The court then said that it must first be determined whether compensation in the form of paid leave or overtime pay given for participation in training courses providing knowledge and skills required for the work of Staff Committees fell within the concept of "pay" within Article 119. After referring to authorities including Rinner-Kuhn the court observed that "pay" under Article 119 comprised any consideration whether in cash or in kind, whether immediate or future, provided that the employee received it, albeit indirectly, in respect of his employment from his employer, whether under a contract of employment, legislative provisions or made ex gratia by the employers.
"In fact, the members of Staff Committees must of necessity enjoy the status of employees of the undertaking and they are obliged to look after the interests of the workforce, thus encouraging the existence of a harmonious working relationship within and in the general interests of the undertaking."
At page 426, paragraph 16 the court observed:
"... it must be be established whether, by reason of the application of national law, the members of Staff Committees who are part-time employees are treated differently from those who are full-time employees as regards the payment of compensation for participation in training courses."
The court held that there was such a difference.In paragraph 22 it said:
" It was argued before the Court that the difference in treatment is due solely to the difference in working hours, and that German law, without making any distinction, only provides for the compensation of employees in respect of hours not worked as a result of participation in training courses. It could not, therefore, be considered that discrimination had been established, unless running Staff Committees could be considered as a particular form of employment to be carried out under the contract of employment."
The court rejected that submission and at paragraph 24 said:
" Furthermore, the argument that compensation for participation in training courses granted by national legislation is calculated only as a function of working hours not worked cannot alter the fact that the members of Staff Committees who are part-time employees receive less by way of compensation than their counterparts who are full-time employees, although in the final analysis the two categories of employees participate in exactly the same number of hours of training in order to be able to attend properly to the interests of the workforce in the interest of good working relations and for the general well-being of the undertaking."
The Industrial Tribunal, in the present case, set out much of what is said in the judgment to which we have referred, and also quoted from the opinion of the Advocate-General including the following passage:
" The difference in treatment lies, therefore, in the obligation on part-time employees to give up part of their spare time to attend training courses, an obligation which does not weigh so heavily on full-time employees. This difference is not without practical significance, given that the majority of part-time employees are women whose spare time, up until now, has often been occupied in educating children and running the household.
... The training in question involves the teaching of material which is necessary to the members of the Staff Committee if they are to carry out their duties correctly. ...Although this sort of training does not, strictly speaking, come within the service required under the contract of employment, the duties for a member of a Staff Committee are nevertheless not completely unrelated to the requirements of employment, since they promote the defence of employees and, in consequence, the social dialogue at the heart of the undertaking in which the employee himself has an interest, in ensuring that dialogue takes place with staff representatives who are competent and well-informed. ..."Underlying the entire decision, and the opinion of the Advocate-General, in the Botel case, it appears to us that it is accepted that Mrs Botel's work on the committee, and the special training required for her to do it properly was a species of "work" for which she was in receipt of "pay" . We are none of us acquainted with German law, but it is obvious from the report and indeed it is a matter of common knowledge that Staff Committees are an important feature of German Labour Law, and their activities and training are specially provided for by statute. It is this that enabled the Advocate-General to say that the duties of a member of the Staff Committee promoted the social dialogue at the heart of the undertaking in which the employee himself had an interest.It appears to us that the activities of a Staff Committee under the German statutory system have little in common, if indeed anything, with the annual conference of an independent British trade union, whether or not it is recognised by a particular employer or employers. We have never heard of any statutory provisions regulating the conduct of such an annual conference, nor providing for training of delegates attending it; nor do we know of any authority for the conclusion of the Industrial Tribunal in the present case at the end of paragraph 6:
"Moreover, we consider that by employees attending at such conferences they were working in the broad sense because their activities were, to quote the Court in the Botel case, "encouraging the existence of a harmonious working relationship within and in general interest of the undertaking."
Certainly there is no British statutory provision compelling employers to pay for such beneficial activities at trade union annual conferences.The Industrial Tribunal appears to us to have concluded that the facts of the Botel case were for all essential purposes on all fours with the present case and having cited at length from that case applied the dicta to which we have referred, and other parts of the judgment, to the present case. We can find nothing whatsoever to support that approach. It appears to us that it begs the question posed by the terms of Article 119, whether there had been an infringement of the principle that men and women should receive equal pay for equal work. There was no dispute that what Ms Nazir received was "pay" ; what was in dispute was whether it was for "work" within the meaning of the Article. That was not a question which was expressly decided in the Botel case, and if it had been decided (as opposed to being assumed) it would have been decided on utterly different facts. We have studied the agreed facts at pages 21 and 22 of the main bundle, as well as the other documents, and in particular the recognition agreement; and we can find nothing to support any conclusion, if indeed it was the conclusion of the Industrial Tribunal, that she was paid for work at the annual conference. The conclusion of the tribunal:"that employees attending at such conferences were working in the broad sense because their activities were, to quote the Court in the Botel case, "encouraging the existence of a harmonious working relationship within and in general interest of the undertaking".appears to us to beg the question whether Ms Nazir was paid for that work.We would mention that in the course of argument we asked whether, if the decision of the Industrial Tribunal were to stand, and Ms Nazir were held entitled to the same remuneration as her male full-time colleague, her part-time male colleague could at once have insisted on a similar right by reference to her pay. It appeared that that conclusion would probably be irresistible. We also raised the possibility that if one of Ms Nazir's colleagues was exceptionally well paid at the bakery, perhaps for discharging onerous management responsibilities, Ms Nazir could insist that since they were engaged on like work at the union conference, so her rewards should equal his. Although Mr Mullins was not prepared to concede that that would be the case, he did not give us any reason to the contrary.For the reasons which we have given, we are all of opinion that the Botel decision does not, on the facts, have any application to the present case and that the appeal must be allowed.