FORD MOTOR COMPANY LIMITED v MRS P CARR [2002] UKEAT 1052_99_2801

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1052_99_2801Case No Appeal No. EAT/1052/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
FORD MOTOR COMPANY LIMITEDAPPELLANTMRS P CARRRESPONDENT
Before
Mr Justice Maurice Kay Mr P DawsonDate 28 January 2002
[1]APPEARANCES For the Appellant MR NICHOLAS RANDALL (of Counsel) Instructed By: Ford Motor Company Ltd Eagle Way Brentwood Essex CM13 3BW For the Respondent MR TOM LINDEN (of Counsel) Instructed By: Messrs Pattinson & Brewer Solicitors 71 Kingsway London WC2B 6ST MR JUSTICE MAURICE KAY : On 11 November 1963 Mrs Pat Carr became an employee of the Ford Motor Company Limited at its Halewood Plant in Liverpool. She was then 16 years of age. She has continued to work there to this day. This case concerns her relationship with the company's pension fund which, in 1963, was known as the Ford Salaried Contributory Pension Fund. At that time its rules provided for compulsory membership for all men and for unmarried women over the age of 30 but for other women membership was voluntary. Regardless of gender, employees had to wait until they had completed two years' service before joining. Mrs Carr did not join the pension scheme at the earliest opportunity which, in her case, would have been November 1965. With effect from 1 April 1978 membership of the pension scheme became compulsory for all employees regardless of gender and it was at this time that Mrs Carr joined the pension scheme. She has remained a member ever since although since 1998, in accordance with the statutory requirement, membership had become voluntary for all employees regardless of gender. Since 17 May 1990 the pension scheme has included a rule which permits the "buy-back" of pensionable service in certain circumstances. These circumstances do not extend to periods of service during which an individual was eligible for membership of the pension scheme but, for whatever reason, did not elect membership. From time to time after 17 May 1990 Mrs Carr made a number of requests to "buy-back" with respect to the period from November 1963 until 1 April 1978. These requests, the most recent of which occurred on 30 February 1997, were all refused on the basis that they were not permitted by the relevant rules. In due course she made an application to the Employment Tribunal referring to both the Sex Discrimination Act 1975 and the Pensions Act 1995 . Although her complaint relates to equality of treatment, the Employment Tribunal correctly decided that the appropriate statutory provisions are those contained in the Pensions Act 1995 . The unanimous decision of the Employment Tribunal was that the Respondent was in breach of the equal treatment rule in denying Mrs Carr the opportunity to buy-back rights "previously denied to her". It granted a declaration that she has a right to "buy-back" pursuant to her request on the basis that such rights had been recognised by the Respondent from 17 May 1990. The company now appeals against that decision. The Statutory Framework[2]Section 62 of the Pension Act 1995 is headed "The Equal Treatment Rule". It includes the following provisions:
"(1) An occupational pension scheme which does not contain an equal treatment rule shall be treated as including one. (2) An equal treatment rule is a rule which relates to the terms on which - (a) persons become members of the scheme, and (b) members of the scheme are treated. (3) Subject to subsection (6), an equal treatment rule has the effect that where - (a) a woman is employed on like work with a man in the same employment, (b) a woman is employed on work rated as equivalent with that of a man in the same employment, or (c) a woman is employed on work which, not being work in relation to which paragraph (a) or (b) applies, is, in terms of the demands made on her (for instance under such headings as effort, skill and decision) of equal value to that of a man in the same employment, but (apart from the rule) any of the terms referred to in subsection (2) is or becomes less favourable to the woman than it is to the man, the term shall be treated as so modified as not to be less favourable."
Section 63 contains a number of supplementary provisions. For present purposes the main ones are:
"(4) Section 62 shall be construed as one with section 1 of the Equal Pay Act 1970 (requirement of equal treatment for men and women in the same employment); and sections 2 and 2A of that Act (disputes and enforcement) shall have effect for the purposes of section 62 as if - (a) reference to an equality clause were to an equal treatment rule, (b) references to employers and employees were to the trustees or managers of the scheme (on the one hand) and the members, or prospective members of the scheme (on the other), (c) for section 2(4) there were substituted - '(4) No claim in respect of the operation of an equal treatment rule in respect of an occupational pension scheme shall be referred to an industrial tribunal otherwise than by virtue of subsection (3) above unless the woman concerned has been employed in a description or category of employment to which the scheme relates within the six months preceding the date of the reference', and (d) references to Section 1(2)(c) of the Equal Pay Act 1970 were to section 62(3)(c) of this Act. … (6) Section 62, so far as it relates to the terms on which members of a scheme are treated, is to be treated as having had effect in relation to any pensionable service on or after 17 th May 1990."
The significance of the date 17 May 1990 is that in Barber v Guardian Royal Exchange Assurance Group [1990] ICR 616 the European Court of Justice specifically limited the direct effect of Article 119 (now Article 141) of the EC Treaty by holding that the Article could not be relied upon in order to claim entitlement to a pension with effect from a date prior to the judgment in that case which was delivered on 17 May 1990. Subsequently, in Vroege v NCIV Instituut voor Volkshuisvesting BV [1995] ICR 635 . The European Court of Justice held that the limitation in Barber did not apply to claims based upon the right to join an occupational pension scheme for which the relevant cut-off date was declared to be 8 April 1976. These two decisions of the European Court of Justice account for the distinction in section 62 between "membership claims" (section 62(2)(a)) and "treatment claims" (section 62(2)(b)). For this reason, and in the light of section 63(6) it is crucial that any particular claim be correctly categorised as either a membership claim or a treatment claim. The Approach of the Employment Tribunal[3]Having set out its findings of fact the Employment Tribunal observed that Mrs Carr's complaint "was based on [Fords'] refusal to let her buy-back lost benefits. This was a complaint based on the terms on which a member of an occupational pension scheme was treated." The Tribunal then set out a paraphrase of the provisions of section 62. The paraphrase of section 62(2) refers to "the terms on which members of the scheme are treated" but does not refer to the terms on which persons become members of the scheme. In other words it focuses on treatment claims rather than membership claims. It also summarises section 63(6) and the cut-off point of 17 May 1990 in relation to treatment claims. A little later it states that Mrs Carr was denied "not membership of the scheme, but the choice whether to join". The final paragraph of the Extended Reasons reads as follows:
"Section 63(6) might appear to be fatal to [Mrs Carr's] claim in that the benefit she wants to buy-back would all have accrued before 17 May 1990. But the treatment of which she complains does not relate to pensionable service before that date: her service before that date was not pensionable, for she was not a member of the scheme. The mischief against which the subsection guards is bad treatment of members while they are members, or after they have become pensioners. However, the refusal to let [Mrs Carr] buy-back, … continued or recurred after 17 May 1990. That is the bad treatment of which [she] complains: it is an incident of her pensionable service after the relevant date."
Analysis[4]In our judgment it is abundantly clear that the Employment Tribunal categorised Mrs Carr's claim as a treatment claim rather than a membership claim. We simply cannot read the Decision or the Extended Reasons in any other way. On the basis of that finding, it was not open to the Employment Tribunal to confer any entitlement upon Mrs Carr in respect of pensionable service before 17 May 1990. That is the effect of section 63(6). Although Mr Linden submits that on close analysis the present case concerns a membership claim rather than a treatment claim and invites us to read the Decision of the Employment Tribunal in that way, we do not consider that we are free to do so. On the other hand, Mr Randall, on behalf of Fords, invites us to accept that the Employment Tribunal properly found the claim to be a treatment claim but, on that basis, to allow the appeal by substituting a decision that Mrs Carr has no entitlement to buy-back because of the 17 May 1990 cut-off date, by which time she had been a member of the scheme for 12 years. He seeks to persuade us that it would be inappropriate to remit the matter to an Employment Tribunal for further consideration, not least because as a matter of form there is no cross appeal challenging the finding of the Employment Tribunal that this was and is a treatment claim. Mr Linden seeks to overcome that procedural problem by inviting us to treat his skeleton argument as, in effect, an amended answer and cross appeal. We say at once that we are entirely satisfied that the interests of justice dispose us to approach the procedural problem in that way.[5]In our judgment the Decision of the Employment Tribunal and the Extended Reasons are fundamentally flawed. We are in no doubt that the appeal must be allowed. Regrettably, however, we can see no alternative to the matter being remitted to a differently constituted Employment Tribunal for re-hearing. Because of the view which the Employment Tribunal took on the original hearing, its approach to the evidence was unsatisfactory. It went into some areas in which it made findings in respect of which there was no obvious relevance. On the other hand, because it had confused the issues and the law applicable to them, its potentially relevant findings raise unresolved questions as to their validity. As a result of all these difficulties, we are wholly unable to make a decision based on reliable findings of fact in the Employment Tribunal to the effect that the claim properly falls in one category or the other. That is why the case will have to be re-heard so that the Employment Tribunal, as a fact finding body, can decide the matters which we are in no position to decide.[6]Because of the view we have taken of this case, it is neither necessary nor desirable for us to decide other issues which were skilfully canvassed before us. We shall simply allow the appeal and order remission for a re-hearing as we have indicated. We can however refer to one further matter which is common ground. If the claim is properly categorised as a membership claim, Mrs Carr would not be entitled to buy-back to any earlier date than 8 April 1976 by reason of the Vroege case. It follows that, ultimately, the fundamental issue between the parties is a narrow one. It can be resolved at the remitted hearing. However, now that the issues have been narrowed and refined, it seems to us that there is scope for the parties to resolve the dispute without the cost of a further hearing in the Employment Tribunal.