MR M B CROSS MRS C GIBSON MR G MALONE MS D-M LECKENBY MS A YOUNG v BRITISH AIRWAYS PLC [2005] UKEAT 0572_04_2303

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2005] UKEAT 0572_04_2303

Case No Appeal No. UKEAT/0572/04

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR M B CROSS MRS C GIBSON MR G MALONE MS D-M LECKENBY MS A YOUNGAPPELLANTS

BRITISH AIRWAYS PLCRESPONDENT

Before

Mr Justice Burton

Date 23 March 2005

[1]APPEARANCES For the Appellants MR ROBIN ALLEN QC (of Counsel) Instructed by: Messrs Charles Russell Solicitors 8-10 New Fetter Lane London EC4A 1RS For the Respondent MR NICHOLAS UNDERHILL QC and MR BRUCE CARR (of Counsel) Instructed by: Messrs Stevens & Bolton LLP Solicitors The Billings Guildford GU1 4YD SUMMARY Transfer of Undertakings / Sex Discrimination Claims by BA employees, retired at 55, for unfair dismissal and sex discrimination dismissed by ET and Applicants' appeals dismissed. Contractual retirement age of 55 for ex-BCal employees transferred by TUPE in 1988, but by 2001 normal retiring age was 60: no undermining of TUPE . ET's finding of justification relating to indirect discrimination of female employees due to some pre-1971 employees retaining 55 retirement age upheld. Dismissal of "piggy-back" claim of direct discrimination by male employees, in the event that indirect discrimination had been found in favour of female employees, rightly dismissed by ET in any event as (unlike Equal Pay Act ) no claim contingent upon finding of indirect discrimination of women could arise unless and until there was direct discrimination of men. THE HONOURABLE MR JUSTICE BURTON (PRESIDENT) These claims, made independently, i.e. without representation by the relevant trade unions, by five Claimants - but with other claims waiting in the wings (at least 80 claims have been issued) or depending upon the result - are brought because of a desire by some, but by no means all, of the employees of British Airways (BA), pilots or cabin crew, to be entitled to work until 60, rather than retire in accordance with the present BA policy of retirement on full pension at 55. They appeal the unanimous decisions in BA's favour by the Employment Tribunal at Watford, after a hearing lasting 14 days in January and February 2004, by a judgment promulgated on 20 May 2004.

[2]BA has, since at least 1971, had (with exceptions immaterial for this purpose) a contractual retirement age ("CRA") for its pilots and cabin crew (which, for these purposes, we shall describe as its "staff", because no others are relevant to this decision), of 55. For many years no one questioned or doubted the benefits of such an arrangement: indeed it seems from paragraph 52 of the Employment Tribunal's judgment ("the Judgment") that, in 1979, there were, at the behest of the trade unions, discussions between the Respondent and unions regarding a reduction of the age to 50. However, in very recent years, as the level of pensions has reduced, due to both market and political pressures, it has no longer been a universally- accepted advantage to retire at 55 rather than work to 60, and some of BA's staff have been arguing for a change. According to paragraph 55 of the Judgment, consideration of the possibility of raising the age of 55 to 60 was given by BA, which estimated a cost to the company, if such policy were implemented, of £105m over the first 10 years. After receipt by BA of a petition in 2000, signed by over 6000 cabin crew, indicating that they would like the opportunity of working longer than 55, there were further discussions and an "Over 55s Working Party" was set up. A firm of consultants, Collinson Grant, was instructed by BA in 2001, and they carried out an exercise in which both BA and the trade unions played a full part. Cabin Crew News of November 2001 summarised the advantages and disadvantages as follows:

"Advantages (i) Existing crew can choose to extend their retirement age to 60 (ii) They have access to 5 extra years income, instead of retiring at 55 and drawing their pension (iii) BA's recruitment and promotion costs are reduced. Disadvantages Estimated costs of £33.9 million over 10 years would need to be offset by other agreement changes or cost savings via cabin crew terms and conditions New Entrants have no option but to work to 60 Existing Crew have to make a one-off choice which cannot be reversed, however many years they are from retirement Crew opting for 60 will transfer to the ground staff pension scheme, accruing at a standard rate of 56 ths of pensionable pay for each year of pensionable service, instead of the Cabin Crew Scheme which accrues at an enhanced rate of 52 nds of pensionable pay Crew opting for 60 will then decide to take early retirement between 55 and 60 will have their pension actuarially reduced Promotion and transfer opportunities will slow down significantly over a 5 year period."

[3]There is no doubt that there was, and on the evidence before the Tribunal remains now, considerable opposition to the proposal and to the end desired by these Claimants, among BA staff and unions. So far as costs for BA are concerned of increasing the retirement age for cabin crew, they were set out in a December 2001 document, and were estimated at £33.9m for the first ten years and, for the retirement age for all to be increased to 60, were estimated at £105.7m. The change was not implemented. Paragraph 59 of the Judgment recites that the Over 55s Working Party effectively came to an end shortly after the 11 September disaster, with the consequential significant downturn in aviation business, and that on 23 November 2001 BA published a statement in Cabin Crew News that "the company has taken the decision not to change the current policy of normal and contractual retirement age of 55".

[4]There is no suggestion that there is anything unlawful or discriminatory about the BA policy of fully-funded retirement at age 55, so far as concerns its application to the staff generally. Those who oppose it have put forward the case which is the subject matter of the claims before the Employment Tribunal and, after their failure at the Employment Tribunal, now on appeal before us. These claims arise in three ways:4.1 The TUPE basis Mr Cross, with eight other pilots in the same position, and Mrs Gibson, with one other cabin crew member in a similar position, base their cases upon unfair dismissal and the Transfer of Undertaking (Protection of Employment) Regulations 1981 (" TUPE "). They worked for British Caledonian Airways Ltd ("BCal") prior to 1988, when there was a merger between BCal and BA as of 1 April 1988, now nearly 17 years ago. This merger was not considered to be, or treated as being, subject to TUPE by either BA or BCal or the relevant unions or their respective employees at the time, nor was it suggested to be until the issue of these proceedings. The Employment Tribunal found it to be subject to TUPE , and there has been no appeal by BA against that decision. Unlike BA where, as we have seen, there was, with the immaterial exceptions, a CRA of 55 for all staff since at least 1971, the staff of BCal had a CRA of 60. Prior to, at or immediately or shortly after, the merger, the former employees of BCal who transferred to BA all signed up for employment by BA on BA terms and conditions, including the BA CRA of 55; and BA paid what we understand to have been a substantial sum in order fully to fund the earlier paid-up pension, accruing five years earlier, for all the former BCal employees, who thus transferred with what, no doubt, would then have been seen, at least by many, to be a substantial benefit. All BA staff, including the ex-BCal employees, have worked for more than 15 years since upon the basis that their CRA was 55; and, as will be seen, the uniform policy of BA (subject to the immaterial exceptions), has been for retirement at 55, as has been accepted and found by the Employment Tribunal (paragraphs 40 and 42 of the Judgment, to which we make further reference below). Notwithstanding this, the eleven employees, for whom Mr Cross and Mrs Gibson stand as exemplar ("the TUPE Claimants"), all of whom are ex-BCal employees, allege that, since in fact there was a TUPE transfer (now established in these proceedings), their old BCal CRA became (unknown to all parties at the time), and has remained, their CRA as BA employees; consequently, they are and were entitled not to retire at 55, and, by causing them to retire at 55, BA has unfairly dismissed them. Their claims failed before the Employment Tribunal, and they now appeal.

4.2 The SDA Claims. Ms Leckenby, Ms Young and (because she can also put her claim this way in addition) Mrs Gibson ("the SDA Claimants") put forward an alternative argument, not based upon BCal, but by reference to the Sex Discrimination Act 1975 ("the SDA "). They accept that the imposition by BA of retirement at 55 on staff generally, both male and female, of itself gives no claim for sex discrimination, either direct or indirect. They refer, however, to a particular piece of BA history, which they allege has an ongoing and discriminatory effect, and upon which they assert they can rely to enable all female staff of BA to claim discriminatory treatment. They make reference to the position of certain BA staff who joined BA prior to November 1971. Prior to November 1971 those employees had a CRA of 60 for males and 35 for females. A special exception was made for the males in 1971, whereby they retained that CRA, while all BA employees since 1971 have had a CRA of 55, with fully-funded pensions. The position of pre-1971 females was harmonised in 1975 when the SDA came into force, allowing all those who had been in service prior to 1971 to retire at 60, while all post-1971 recruits had a CRA of 55. Only 536 of these pre-1971 employees remained in employment (after others have retired, died or simply left or moved) in 2002, out of a total relevant workforce of 13,127. The SDA Claimants rely on the fact that out of this 536 many more are male than female, while of the totality of BA staff many more are female than male. They allege that this amounts to indirect discrimination, which cannot be justified, and that, as a result, all post-1971 female BA staff should also be given a CRA of 60. This claim also failed before the Employment Tribunal and is now the subject of this appeal.

4.3 There is in addition what has been called a "piggy-back" claim made by the fourth Claimant, Mr Malone. Mr Malone is not involved in the TUPE claims, not being an ex-BCal employee, and is not, of course, female, and cannot therefore avail himself of the SDA claim. His claim is that if the SDA claims, made on behalf of all female BA staff, succeed, by reference to the comparison with the 536 pre-1971 staff, and the CRA for all female BA staff is consequently changed to 60, then it would at that stage become discriminatory for BA not to have a CRA of 60 for all its male employees as well. The piggy-back claim, also, failed at the Employment Tribunal, and is the subject of appeal to us.

[5]The Claimants before us have been represented by Robin Allen QC, who also appeared below, where he led Thomas Kibling of Counsel. BA has been represented before us, as they were below, by Nicholas Underhill QC leading Bruce Carr. We have been greatly assisted by their submissions, both written and oral. As will be seen, in certain respects, BA supports the decisions of the Tribunal upon different grounds. The TUPE Claims

[6]The issue arises, as we have indicated, because the retirements of the lead Claimants, Mr Cross (on 1 August 2002) and Mrs Gibson (on 15 December 2001), are said to have been unfair dismissals. BA's primary response is to rely on s109 of the Employment Rights Act 1996 (" ERA ") so as to assert that the Employment Tribunal has no jurisdiction, because the Claimants retired on their "normal retiring age" ("NRA") such that jurisdiction was excluded by s109: and in any event BA asserts that the decision was fair for a substantial other reason within s98(1)(b) of ERA .

[7]S109, which thus excludes an employee's statutory right not to be unfairly dismissed by his employer under s94 of ERA , reads in material part as follows:

"…section 94 does not apply to the dismissal of an employee if on or before the effective date of termination he has attained – (a) in a case where – (i) in the undertaking in which the employee was employed there was a normal retiring age for an employee holding the position held by the employee, and (ii) he age was the same whether the employee holding that position was a man or a woman, that normal retiring age, and (b) n any other case, the age of sixty-five."

[8]By s235(1), the definition section of ERA : ""position", in relation to an employee, means the following matters taken as a whole –(a) his status as an employee

(b) the nature of his work

[9]It can be seen therefore that the CRA is a contractual right and obligation to retire at a certain date, although, except of course in the event of 'lifetime' contracts, contracts can be terminated on contractual notice (or for cause) prior to retirement. NRA is not contractual, but is defined by reference to what is normal. It has been addressed in a number of leading cases, two of them in the House of Lords, Waite v GCHQ

[1983] 2 AC 714

, and Hughes v DHSS

[1985] 1 AC 776

. The effect of those cases, and of two other significant decisions, both by the Court of Appeal, Brooks v British Telecommunications plc

[1992] ICR 414

and Barber v Thames Television plc

[1992] ICR 661

is authoritatively summarised by Peter Gibson LJ, giving the lead judgment in the other leading case on the topic, Barclays Bank plc v O'Brien

[1994] ICR 865

. We repeat that important passage from his judgment (at 871), because it so concisely sets out the law, complete with his cross-references as set out in that law report, although the page references in Waite and Hughes are to the ICR and not the AC reports:

"1. The social policy underlying section 64(1) of the Act of 1978 is to secure fair treatment as regards compulsory retirement as between different employees holding the same or a similar "position" (in the statutory sense): see Waite v Government Communications Headquarters [1983] ICR 653, 662. Such employees can conveniently be referred to collectively as "the group:" see Hughes v Department of Health and Social Security [1985] ICR 653, 662. 2. Where there is a contractual retirement age applicable to all or nearly all the employees in the group, there is a presumption that the contractual retiring age is the normal retiring age for the group: see Waite [1983] ICR 653, 662. 3. The presumption can be rebutted by evidence that there is in practice some higher age at which employees in the group are regularly retired and which they have reasonably come to regard as their normal retiring age. 4. "

Normal" in this context is not a synonym for "usual" and is not to be determined by a purely statistical approach: see Waite

[1983] ICR 653

, 662. 5. The question to be asked by the industrial tribunal is: what, at the effective date of termination of the applicant's employment and on the basis of the facts then known, was the age which employees of all ages in the group could reasonably regard as their normal retiring age? See Brooks v British Telecommunications Plc

[1992] ICR 414

, 434. 6. That some employees could reasonably expect to retire at different ages for special reasons does not entail that they and their group do not have a normal retiring age: see Waite

[1983] ICR 653

, 662. 7. The "position" of an applicant does not include the previous history of his employment (see Hughes....

[1985] ICR 419

, 429) nor his age (see Brooks …[1992]ICR 414) but the fact that employees have different retirement ages as terms of their contracts of employment may be taken into account in determining whether the employees are in the same "position": see Barber …

[1992] ICR 661

. 8. The test of reasonable expectation is an objective one, not dependent on what the applicant or any other individual in the group actually thought: see Hughes …

[1984] ICR 557

, 581. 9. A normal retiring age is an aspect of an employer's employment policy which, once promulgated to the employees concerned, will take effect as their normal retiring age unless it is a sham or has been abandoned (see Hughes

[1984] ICR 557

, 581) or is never implemented: see Brooks ...

[1992] ICR 414

, 433. 10. If the contractual retiring age has been abandoned and employees retire at a variety of higher ages, there will be no normal retiring age and the statutory alternative of 65 will apply: see Waite ...

[1983] ICR 653

, 663. "

[10]It is, in the circumstances, common ground that NRA is thus a different concept from CRA. What the CRA is may well be at least the starting point, if not the best evidence, of what the NRA is, but it is not at all decisive of it. The question as to what the NRA is depends upon an objective assessment of the norm at the relevant time. The NRA may be higher than the CRA (as for example in Hughes ) or may be lower than the CRA (as for example in Barber ). It is common ground that paragraph 3 of Peter Gibson LJ's summary should be read as being a reference to 'some lower age' as well as to 'some higher age', and that Bratko v Beloit Walmsley Ltd

[1995] IRLR 629

, a judgment of the Employment Appeal Tribunal, per Judge Hicks QC, was wrongly decided.

[11]The material findings of the Employment Tribunal are as follows:

"34. …We find that both the Applicants and the Respondent worked on the basis that the retirement age for the Applicants, contractual or otherwise, was 55. 38. …In practice … all pilots and cabin crew retired at age 55 in accordance with the contractual provisions and the Respondent's policy on retirement. 40. When the employment of both Mr Cross and Mrs Gibson ended in 2002 and 2001 respectively, the Respondent's policy of enforcing retirement at 55 was well known throughout the company. In respect of cabin crew, the retirement age had been reviewed. Notification of the outcome of the review was given in a document 'Cabin Crew News' on 23 November 2001 … when the Respondent informed its cabin crew that there would be no change to their normal retirement age. 41. While the Applicants had a different contractual retirement age (because of TUPE) it does not necessarily follow that that sets them apart from other employees in their position as defined in s235 ERA. That the contractual retirement age can be higher than the normal [retiring] age is demonstrated in Barber … 42. The understanding of both Applicants at the determination of their employment was that their employment would end in accordance with the written contracts entered into in March 1988 and the Respondent's well-known normal retirement age policy."

[12]The conclusion as to what the NRA was would appear to follow naturally, in accordance with Peter Gibson LJ's guidelines in O'Brien , and with the clear statement by Lord Fraser in Waite at 724C, which is the seminal passage from which much of those guidelines is drawn:

"The proper test is … to ascertain what would be the reasonable expectation or understanding of the employees holding that position at the relevant time."

[13]The Tribunal however went on to conclude in paragraph 43 as follows:

"On the facts found, we consider, however, that the pilots and the cabin crew who transferred from BCal were in separate groups, one for pilots and one for cabin crew, within the Respondent's workforce from their colleague because of their contractual retirement age. We recognise that contractual retirement age is only one factor in identifying the normal retiring age and that the Respondent is able to change its policy. The Respondent did not address this issue with specific regard to the Applicants or other transferees. On the evidence before us, all the other air staff, be they pilots or cabin crew, of the Respondent who had contractual retiring ages of 60 so far as we are aware also had a normal retiring age the same as their contractual retirement age. Similarly for ground staff. When employees were found to have been given a contractual retirement age that was different to people in the same situation, the Respondent took steps to change it. When viewed objectively and having regard for the obligation to give a purposive interpretation to TUPE, as the Respondent had not addressed itself to the question of the normal retiring age for the Applicants and thus never considered its policy towards them, we consider that if aware of all factors, a reasonable understanding for Mr Cross and Mrs Gibson would be that their normal retirement age was 60, even though the former BCal employees had been fully integrated since 1988 with the other pilots and cabin crew. To that extent we accept the Applicants' submissions that they had protection from unfair dismissal until aged 60 as the normal retiring age was 60 before the transfer and remained as such unless or until the Respondent addressed and changed its policy towards them."

[14]We conclude that this was not a correct conclusion in law. It is, in our judgment, inapt in judging what the NRA was , in the light of the authorities, to ask what "if aware of all factors a reasonable understanding for Mr Cross and Mr Gibson would be " or, rather, would have been . To look at what would be, or would have been, the norm if the situation had been otherwise, or had been appreciated by all or any of the parties to be otherwise, is not to arrive objectively at what the norm was. The same would be the case if the parties were simply unaware of what the contract was, or what their contractual rights or obligations were, or one side or the other had been misled as to what the terms and conditions were, or had simply forgotten them. In any event, the terms and conditions are, as is clear from the authorities, only a part of the picture. The CRA is only a starting point, even if the parties know what the terms and conditions are. Similarly, by reference to paragraph 7 of the O'Brien guidelines, "the fact that employees have different retirement ages in terms of their contracts of employment may be taken into account in determining whether the employees are in the same "position"". If this is the case where the terms and conditions are known, then the position is a fortiori if they are not known. It is quite clear to us that the NRA of all employees, including those who had been at BCal, was, by 2001, 55.

[15]In the event, Mr Allen QC did not seek actively to support the basis upon which the Employment Tribunal founded its decision in his favour in this paragraph, and we consequently did not call upon Mr Underhill QC in this respect, and we conclude, as set out above, that it cannot be supported. However, Mr Allen QC puts his case in a way which does not depend upon that finding by the Employment Tribunal. Accepting, as he therefore must, that, by understanding, acceptance, desuetude or otherwise, the NRA was, in 2001, 55, he submits that it was what became called, in the course of argument, an "impermissibl e " NRA. He puts his argument on two bases, both reaching the same point: 15.1 It is now common ground that the CRA of 60 transferred (unknown to all parties) in 1988, by virtue of TUPE . Regulation 5(2) reads in material part:

"… on the completion of a relevant transfer … all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee."

Thus, in fact, the TUPE Claimants retained their contractual right to 60 as a CRA as against their new employer BA, notwithstanding that they signed up to BA's terms and conditions with a purported CRA of 55; and any purported contractual amendment or variation, or imposition of different terms, if it is in any way to the employee's detriment, or unfavourable to the transferred employee, is of no effect. Although such a contractual variation or fresh agreement can be made subsequently, it cannot be done at the time of, or by reference to, the transfer: see Foreningen af Arbejdsledere i Danmark v Daddy's Dance Hall A/S [1988] ECR 739 at para 17, and Wilson v St Helens Borough Council

[1998] ICR 1141

HL. He submits that to allow a different age to become the NRA from the CRA which was required to transfer under TUPE , and which, so far as BCal is concerned, had been the NRA for its employees, is to evade TUPE . While national law can allow "the employment relationship to be altered in a manner unfavourable to employees in situations other than the transfer of an undertaking" (para 17 of Daddy's Dance Hall ), such European Court decisions as Pfeiffer v Deutsches Rotes Kreuz Kreizerband Waldshut EV

[2005] IRLR 137

make clear the obligation on a national court to interpret national law so far as possible in the light of the wording and the purpose of, in this case, the Acquired Rights Directive (EEC 77/189) , which underlay and inspired TUPE . 15.2 The alternative way in which Mr Allen QC puts the Claimants' case, is that, by virtue of Regulation 5, quoted above, the employer's obligation in relation to the NRA transferred, as well as in relation to the CRA.

[16]The Employment Tribunal expressly rejected this latter argument:

"35. The Tribunal is under an obligation to give purposive construction to TUPE in a manner which accords with the decisions of the European Court of Justice on the Directive. Applying Regulation 5 we had regard to Article 3 of the Acquired Rights Directive, and the reference there to rights or obligations arising from the contract of employment or from the employment relationship. We do not consider the statutory right not to be unfairly dismissed is a right, power, duty or liability under or in connection with the Applicants' contracts of employment. Rather the right is a statutory one in the same way as the right to an itemised pay statement is or, as the Respondent referred, to the statutory right for consultation in respect of large scale redundancies which applies to all employees in prescribed circumstances. Employees in a transfer have the same statutory rights they had before i.e. a right not to be unfairly dismissed and to have the ability to make a complaint so far as legislation provides."

[17]We do not agree with Mr Allen QC, and accept the submission of Mr Underhill QC. We deal first with the first of Mr Allen's submissions. There is no question here, in our judgment, of an evasion, or abuse, of TUPE . We do not know what would have happened if the parties had both known the position at the time, or indeed at any time over the next thirteen years. But at best the position is that, unknown to all, the CRA of the transferred BCal employees was 60, but, notwithstanding such contractual entitlement in 1988, that by 2001 on any basis the NRA was 55. It was ratified and applied constantly over that thirteen-year period; by the imposition and acceptance of BA's policy by its (mistaken) incorporation into the terms and conditions of employment, by the discussion about possible changes to such policy and a decision to leave it unchanged, by numerous people retiring in accordance with it, including, as is common ground, a substantial number, probably in three figures, of former BCal employees (and indeed no-one retiring on any other basis). We shall refer below to the dictum of Lord Slynn of Hadley at 1165D in Wilson , leaving open the possibility of a later valid variation by conduct at a "time when the link with the transfer is broken or can be treated as no longer effective": but this is not a conclusion based upon contract, but simply upon the genuine and objective understanding and expectation of the parties, as found by the Employment Tribunal, both over the period and, materially, by and at a date thirteen years after the transfer. If the contractual term for these BCal employees, who had long since, as the Employment Tribunal put it in paragraph 43 of the Judgment, been "fully integrated with the other pilots and cabin crew" (i.e. so that they all held the same position) , in fact gave them a CRA of 55, as it happens derived from TUPE thirteen years earlier, that fact did not, in our judgment, render impermissible , or indeed in any way alter, what was plainly the NRA.

[18]As to Mr Allen QC's second argument, we agree with the Employment Tribunal's paragraph 35. The statutory obligation of the employer to comply with unfair dismissal legislation, and of the employee to have the benefit of it, did not lead to transfer as a result of TUPE ; it applied both before and after TUPE in any event. At any rate, even if it did transfer, the liability or entitlement would be in accordance with what the unfair dismissal legislation would provide at the time: not so as to freeze the entitlement of the employee if the law changed (whether so as to abolish the right to claim unfair dismissal or to limit it or to expand it) or if the NRA changed. The employee would have the rights given to him (or from which he was excluded) by statute according to what the NRA would be at the time, objectively construed. Mr Underhill QC and Mr Carr put forward two persuasive arguments:18.1 There need not be a CRA, and need not have developed an extra-contractual NRA. In those circumstances, employees of a transferor company would have been entitled to rely on the upper age limit of 65, provided by s109(1)(b), not because it was the NRA, but simply by way of a fallback position. Is an employee transferring under TUPE to a new company where there is, perhaps, no CRA, but an objectively established practice of retirement at 60, i.e. an NRA, to be entitled to insist on retirement at 65 and to sue for unfair dismissal?

18.2 Mr Underhill QC developed further the argument referred to by the Employment Tribunal at paragraph 35 of the Judgment. There are, or have been, statutory provisions – for example until recently in respect of the right to claim for alleged disability discrimination (s7 of the Disability Discrimination Act 1995 now repealed), or in respect of certain consultation requirements - which depend upon the size of a respondent's workforce. Are rights and obligations under statute, which apply to an employee when working for a large employer, to transfer, so as to place a smaller transferee employer under identical obligations?

[19]Consistent with his logic, Mr Allen QC asserts such to be the case. But that cannot be right. How would such obligations be enforced – how could an employment tribunal be clothed with jurisdiction? Would the new employer be deemed to have the same number of employees as the old? Mr Underhill QC submits that this simply exemplifies that only the contractual obligations transfer, and that statutory obligations do not transfer by TUPE , but vest in both transferor and transferee as a matter of statute, and fall to be construed according to the characteristics of the relevant workforce. One of the characteristics of the workforce, so far as the jurisdiction of an employment tribunal under s109 is concerned, will be whether there is an NRA of the relevant workforce, and if so what it is.

[20]This is perhaps an unusual case, in which, genuinely, all parties did not appreciate that TUPE applied, and where the NRA was, and remained, fixed, and without reference to TUPE , and without thought of what a CRA affected by TUPE might have been. We are quite satisfied however both that there is no evasion of TUPE and also that no right was transferred to a 'frozen' NRA of 60. The NRA was 55, and so s109 of ERA excluded the Claimants' rights to claim unfair dismissal. We are quite satisfied about this, and consequently do not consider that this is an appropriate or necessary case in which to make a reference to the European Court of Justice, as invited by Mr Allen QC.

[21]Mr Underhill QC had a fallback argument, in case it was necessary, by reference, as he put it, to 'events since 1988'. This argument is put in two different ways, first by addressing the CRA and what one might call a conventional contractual route, based upon a case of variation, and secondly by a more innovative argument, not by reference to contractual variation, but still in part deriving from Lord Slynn's dicta in Wilson , to which we have referred in paragraph 17 above. Both arguments are put forward only upon the basis that he would have failed on the primary argument to which we have referred above, based on the NRA.

[22]The case on variation is put primarily by reference to the position of Mr Cross, as exemplar of ex-BCal pilots. Subsequent variation of the contract between transferred employee and transferee employer can, in appropriate circumstances, be recognised as not rendered invalid by TUPE . Mr Cross, at a date between April 1988 and July 2002, transferred from Gatwick, where he was based with BCal, to Heathrow, which was, so far as BA pilots are concerned, the desirable place to work because of its advantageous terms and conditions. The evidence before the Tribunal was that no pilot was ever allowed to transfer to Heathrow except on the basis of accepting the BA standard conditions, including a CRA of 55, and, indeed, that this had been the case with regard to, for example, certain former Dan Air employees. The Tribunal dealt with this in paragraph 26 of the Judgment as follows:

"During Mr Cross's employment with the Respondent he transferred from Gatwick Airport, where he had been based with BCal, to Heathrow, and also gained promotion to Senior Co-pilot. At the time Mr Cross changed from Gatwick to Heathrow, had he not been on the Respondent's standard terms for employment for pilots he would have been required to agree to a change to those terms, that being the Respondent's policy at all times. As the Applicant was, however, working to a British Airways contract of employment, no consideration was given by either party to any variation to any contractual term."

[23]Mr Underhill QC accepted that the position in relation to Mrs Gibson was much less clear in terms of a case as to whether, and if so when, there was a variation. It is contended that at some (unidentified) stage she changed from full time to part time and a varied contract, now owing nothing to the original transferred BCal contract, and containing, lawfully, the BA CRA, was effected.

[24]The Tribunal did not accept the case on variation, as set out in paragraph 34 of the Judgment:

"We considered whether the contractual retirement age term had subsequently been varied. The Applicants' contractual terms can be varied simply through effluxion of time. Both Mr Cross and Mrs Gibson had worked for the Respondent as members of its workforce under its terms and conditions of employment. We find that both the Applicants and the Respondent worked on the basis that the retirement age for the Applicants, contractual or otherwise, was 55. After the transfer, no consideration was given to any change. We do not consider that by working for the Respondent in a normal manner, accepting promotions and varying the place of work as Mr Cross did, or the hours of work as Mrs Gibson did, are such as to mean that the Applicants waived or agreed to any change to their contractual retirement age. Solectron Scotland Ltd v Roper [2004] IRLR 4 demonstrates the longevity of contractual terms in the context of TUPE when changes to them are not addressed. "

[25]So far as Mr Cross is concerned, Mr Underhill QC's case is based upon the following series of propositions:25.1 His contract with BCal did not have a mobility clause, and he was based solely at Gatwick.

25.2 The new contract he entered into with BA, dated 4 March 1998, to commence on 4 April 1998, simultaneous with the TUPE transfer, as it now has been found to be, contained a worldwide relocation clause, which would have fallen foul of TUPE .

25.3 When he was moved to Heathrow, sometime after, and nothing to do with, the TUPE transfer, it was a requirement that he have a CRA of 55, and, insofar as that provision had not been valid before that date, it was valid thereafter, as part of the variation of his contract constituted by the geographical move, coupled with his promotion.

[26]The relevant paragraph, 17, of the judgment of the European Court in Daddy's Dance Hall at 754 reads as follows:

"Consequently, in so far as national law allows the employment relationship to be altered in a manner unfavourable to employees in situations other than the transfer of an undertaking, in particular as regards their protection against dismissal, such an alternative is not included merely because the undertaking has been transferred in the meantime and the agreement has therefore been made with the new employer. Since by virtue of Article 3(1) of the Directive, the transferee is subrogated to the transferor's rights and obligations under the employment relationship, that relationship may be altered with regard to the transferee to the same extent as it could have been with regard to the transferor, provided that the transfer of the undertaking itself may never constitute the reason for that amendment."

[27]Lord Slynn in his speech in Wilson at 1165 C-D takes this forward:

"The question as to whether and in what situations, where there has been a transfer and employees have accepted the dismissal, claimed compensation based on it and worked for a long period after the transfer, there can be a valid variation by conduct is not an easy one. I do not accept the argument that the variation is only invalid if it is agreed on as a part of the transfer itself. The variation may still be due to the transfer and for no other reason, even if it comes later. However it seems that there must, or at least may, come a time when the link with the transfer is broken or can be treated as no longer effective."

[28]At 1166 E-F he adds as follows:

"… although, on a transfer, the employee's rights previously existing against the transferor are enforceable against the transferee and cannot be amended by the transfer itself, it does not follow that there cannot be a variation of the terms of the contract for reasons which are not due to the transfer either on or after the transfer of the undertaking."

[29]That variation by conduct per se is not easy to establish in an employment context, and particularly so after a TUPE transfer, is recognised by Elias J in Solectron Scotland Ltd , referred to in the citation from the Judgment at paragraph 34, set out in paragraph 24 above. However, at least in relation to Mr Cross, there is far more of a case than simply variation by conduct. The difficulty that Mr Underhill QC has to grapple with is that pointed out by the Employment Tribunal, namely that, if there was a variation including, for the first time, the CRA on the move to Heathrow, the parties were not conscious of it at the time and, if established, it would have to be established simply by reference to being a part of a varied contract for service at Heathrow, not on the basis of there having been a consensual variation of the CRA itself. It is this difficulty which Mr Underhill QC has sought to meet by his alternative argument, which is not based upon variation. It seems to us perhaps to be born out of the words of Lord Slynn at 1165 D "it seems that there must, or at least may, come a time when the link with the transfer is broken or can be treated as no longer effective". Mr Underhill QC submits that, perhaps particularly in an unusual case such as this, where the parties were not conscious of TUPE , or of what they were consequently doing, it can be established that many years of employment and of constantly changing circumstances went by, with the BCal employees fully integrated into the BA workforce, such that there came a time when the 1988 transfer was simply past history, and this must at any rate have occurred by 2001. Hence, even without a contractual variation, there would come a time when the variation which took place at the time of the transfer, and would have been ineffective for that reason, cannot any longer be treated as ineffective. In essence, he was putting forward what came to be described in argument as a "suspensory" ineffectiveness of a TUPE clause. The nearest analogy would be a force majeure provision in a commercial contract, suspending entitlement or obligation to perform. He could find no exact common law parallel, but submitted that, where construing European Law, a court is entitled to effect the result intended by the Directive , which was not to invalidate arrangements whether entered into afresh, or simply continued by consensual arrangement, long after a TUPE transfer and its after-effects.

[30]In the light of our firm conclusion set out above, we do not need to reach a conclusion on these fallback arguments of Mr Underhill QC, and we do not do so. However the very existence of the arguments, and the careful consideration of the words in Daddy's Dance Hall and of Lord Slynn in Wilson which they render necessary, support us in our earlier conclusion that, irrespective of contract and of the fate of the CRA, an actual NRA, rooted in the facts found by the Employment Tribunal, in this case in the paragraphs of the Judgment which we have cited in paragraph 11 above, was not impermissible.

[31]Although the Tribunal found, contrary to the submissions of the Respondent, that s109 did not apply so as to exclude the Claimants from claiming unfair dismissal, it decided in paragraphs 47 to 49 of the Judgment that the dismissal was for some other substantial reason , within the meaning of s98(1)(b) of ERA , and was fair. It became clear in the course of argument that we did not need to address the Employment Tribunal's reasoning or conclusion in this regard:31.1 If, as turned out to be the case, we concluded that there was an NRA in 2001 of 55 and that, consequently, s109 applied to exclude the jurisdiction of the Employment Tribunal, not only is it not necessary to address this fallback argument, but it would follow (although follow quite superfluously) that the dismissal was for a substantial other reason, namely because of the NRA, and was fair.

31.2 If, however, we were to have concluded that s109 did not apply, because there was an impermissible NRA, i.e. an NRA which was tainted by TUPE , then it would follow that the employers could not have been entitled to rely upon it as a substantial other reason , and dismissal on that basis would not have been fair.

[32]The point therefore does not arise for consideration in this judgment. The Indirect SDA Claimants

[33]We turn to the claims by Ms Leckenby and Ms Young and also, supplementary to her TUPE claim, Mrs Gibson. Their complaint is, as summarised above, that all employees who have joined BA since 1971 have had a retirement age (for these purposes we do not need to distinguish between CRA and NRA) of 55. Those who were employed prior to 1971 were permitted, as a result of trade union negotiation, to retain a retirement age of 60. Post-1971 employees are thus not entitled to the exception, which was negotiated for the pre-1971 employees. On the figures contained in Table D, set out and adopted by the Employment Tribunal after paragraph 73 of the Judgment, as at 31 May 2002 material BA staff totalled 13,127. Of those, 8948 were women and 4179 were men. 536 of those 13,127 are pre-1971 employees and, of the 536, 406 are men and 130 are women. Thus although the uniform post-1971 retirement age of 55 is not discriminatory, complaint is made of the retained privilege of the pre-1971 employees and:(i) There are more women than men not entitled to that privilege.

(ii) There are more men than women entitled to that privilege.

[34]It is thus alleged that there is indirect discrimination of post-1971 women employees, simply by reference to that aspect, but it would have the effect, if the complaint were justified, that all post-1971 women employees may be then entitled to the same privilege as pre-1971 male employees: and, either by reference to what we have referred to as the " piggy-back " claim in these proceedings, or otherwise, it would then be asserted that all post-1971 male employees may be then entitled to the same as may thus have been achieved by the post-1971 female employees. Thus, by reference to the position of the 536 pre-1971 employees, the position of up to 12,591 post-1971 employees could be affected.

[35]The relevant statutory provision, introduced into the SDA as a result of the Council Directive 97/80/EC ("the Burden of Proof Directive ") is s1(2)(b) of the SDA :

"(2) In any circumstances relevant for the purposes of a provision to which this subsection applies, a person discriminates against a woman if – (b) he applies to her a provision, criterion or practice which he applies or would apply equally to a man, but – (i) which is such that it would be to the detriment of a considerably larger proportion of women than of men, (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."

[36]The issues which the Employment Tribunal had to decide are:36.1 Was the situation, described in paragraph 33 above, the application by BA of a provision, criterion or practice ("PCP") to the post-1971 women employees (the "PCP Issue")?

36.2 If a PCP, was it to the detriment of a considerably larger proportion of men than of women (the Adverse Effect Issue)?

36.3 If so, can it be shown by BA to be justifiable within s1(2)(b)(ii) (the Justification Issue)?

[37]So far as these Claimants are concerned, there is no issue as to s1(2)(b)(iii). It was also common ground that the time at which the question of indirect discrimination fell to be determined was in 2001/2. The PCP Issue

[38]The Employment Tribunal concluded that there was the application of a PCP:

"76. The Respondent's position was that it had an old policy and a new policy. Cabin crew, who had been employed prior to 1 November 1971, could continue in work with the Respondent after age 55 and up to age 60, those employed on or after 1 November 1971 could not. We find, however, that, as the Applicants had to have been employed prior to 1 November 1971 in order for the Respondent to permit them to continue in work until aged 60 as cabin crew, we are satisfied that this amounts to a PCP. That this arose out of negotiations and agreement between the Respondent and the trade unions does not affect that conclusion."

[39]BA challenges that conclusion on two bases: 39.1 by reference to a judgment of the Employment Appeal Tribunal per Judge Reid QC in Aintree Hospitals NHS Trust v Reynolds (

EAT/0667/02

(b) , which reads as follows:

"In any circumstances relevant to the purposes of any provision of this Act … a person discriminates against a woman if – (b) he applies to her a requirement or condition which he 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."

In relation to similar facts to this case, where the terms of employment of employees pre- and post-1993 were different, Judge Reid QC concluded: "14. … After the Trust was created it employed all new employees on its own new terms. It did not seek to alter the terms of those already employed. The new terms applied equally to all new employees. It seems to us an abuse of language to describe the effect of the historical fact that persons employed after the creation of the Trust were employed on different terms than those employed by the Trust's predecessor as the application of a requirement or condition." 39.2 by reference to a more general argument that, whereas a length of service requirement before qualifying for a benefit may be discriminatory against women, this is not such, but is a 'date of recruitment' provision applying to both men and women providing for non-retroactivity. It is not a way in which people may qualify for a benefit, but simply the recording of a historical position, and there is no sense of anything being applied to present employees.

[40]We are persuaded by Mr Allen QC that the Employment Tribunal was right in its conclusions, and for the reasons it gave. Aintree may perhaps have been right by reference to s1(1)(b), on the basis that in such a case an employer is not applying a requirement or condition to an existing employee if it is not setting a test or standard with which he or she must comply, merely by stating as a fact that only people employed 30 years earlier are eligible for a benefit; but it seems to us clear that, even if it were not the application of a requirement or condition, it is certainly the application of a criterion which the post-1971 employees cannot meet, or the application of a practice that post-1971 employees do not have the relevant entitlement. Adverse Effect

[41]There are three prefatory matters to address:41.1 The Employment Tribunal did not use the correct statutory language when it decided this issue in favour of the Applicants. It referred in paragraph 82 of the Judgment to a "significant difference" and a "significant proportion" rather than a "considerably larger" proportion. This difference in language may or may not be material. Of course there is considerable authority which requires that employment tribunals' decisions are not regarded as holy writ, and it is the substance of their conclusions that falls to be considered. On the other hand, if the wrong statutory wording is used, it may mean that the wrong answer was given, and a decision with which a party disagrees, which it might otherwise have had to characterise as perverse, can simply be described as wrong in law because the wrong test was applied.

41.2 There was some discussion and dispute between the parties as to whether it is to the disadvantaged group (i.e. in this case the post-1971 employees) or the advantaged group (the pre-1971 employees) to which the Tribunal must look, in order to judge the question of considerably larger proportion of women than of men , or to both groups.

41.3 The Employment Tribunal found, in paragraph 83 of the Judgment, that "we consider the PCP to have an inherently discriminatory impact on women, although we do not have any specific information, other than in relation to Ms Leckenby, on the effect of that impact". They continued "we accept the Respondent's submission, however, that as at 1 November 1971 there was nothing inherently gender disproportionate in the changes introduced at that time. We observe also that there will come a time when the PCP will cease to have a significant, and later any, disproportionate impact". Mr Underhill QC is very critical of this passage, both because of its lack of foundation in evidence, to which the Tribunal itself refers, and also by reference to its lack of logic and internal consistency. For the purpose of the Adverse Effect Issue, Mr Allen QC would in any event submit that this conclusion of inherently discriminatory impact, while correct, would appear not to have been determinative in the Tribunal's conclusions on s1(2)(b), but rather a fallback or confirmatory view.

[42]We turn to consider in a little more detail the figures in Table D, upon which the Employment Tribunal based itself:42.1 The ratio of pre-1971 employees (536) to post-1971 employees (12,591) is 1:23.5. Comparison of the 130 women in the pre-1971 group with the 8818 in the post-1971 group, women clearly having been considerably recruited since 1971, results in a ratio of 1:67.8. The ratio of men in the pre-1971 group (406) to men in the post-1971 group (3773) is 1:9.3. This is the method of comparison adopted by Mustill LJ in Jones v Chief Adjudication Officer

[1990] IRLR 533

at para 36.

42.2 As for the disadvantaged group , out of a total number of male employees of 4179, 406 are pre-1971s, so 90.28% do not qualify. As for women, out of 8948, 98.55% do not qualify.

42.3 The obverse or mirror image of this is that 1.5% of the female workforce and 9.72% of the male workforce do qualify.

[43]There are serious questions about the validity of all three calculations:43.1 The Jones calculation does not in fact provide a clear picture, at any rate in this case, because it is an amalgam, not easily enabling an appreciation of the size and interrelationship of the two different groups. It is, as Mr Underhill QC submits, "far too simplistic given changes to the composition of the workforce which will have occurred over that 31-year period – importantly, it ignores any increase in the proportion of women in the post-1971 workforce".

43.2 The proportions, 90.28% and 98.55% and 9.72% and 1.45% are, as we have said above, simply obverses or mirror images. Balcombe LJ pointed this out in R v Employment Secretary ex parte Seymour-Smith

[1995] ICR 889

at 905 DC. There may be a clear message to be derived if each group is sizable but where, as here, one group or other is extremely small, the figures and the percentages will inevitably be skewed.

[44]It is common ground that no assistance can be gained from contrasting the wording of s1 of the SDA before its amendment by the Burden of Proof Directive (and indeed the concomitant fact that most, if not all, of the reported authorities have been directed towards the older format). Even though it might be thought that the old s1(1)(b) is geared towards the advantaged group ("which is to her detriment because she cannot comply with it") and the new provision s1(2)(b) more towards the disadvantaged group , such argument is rendered pointless by the inclusion in the Burden of Proof Directive , by Article 6, of a "non-regression" clause, whereby the level of protection of workers is not to be less as a result of any new provision.

[45]Mr Allen QC in Secretary of State for Trade and Industry v Rutherford No 2

[2005] ICR 119

submitted, as Counsel in that case (para 31 at 192), that the Burden of Proof Directive "required the primary or predominant relevant focus to be on the disadvantaged group, rather than on those who are advantaged", but this argument does not appear to have prevailed, as appears from the following passage in the judgment of Mummery LJ:

"35. I do not read the Directive as having the far reaching effects … for which Mr Allen contends. The definition of indirect sex discrimination in Article 2 of the Directive focuses on an apparently neutral provision, which has unjustified disadvantages for a substantially higher proportion of the members of one sex. The definition describes when a certain state of affairs (i.e. indirect discrimination) exists: it does not, however, prescribe the methodology for assessing the statistical evidence in order to determine whether that state of affairs exists … It has been left to the national courts and tribunals, which hear and assess the evidence and find the facts, to work out from case to case a satisfactory method for assessing whether or not there is disparate adverse impact in the particular case."

[46]In this case at any rate it is Mr Underhill QC who submits that the Employment Tribunal should only have looked at the disadvantaged group, and concluded that 98.5% as against 90.28% is not a "considerably larger proportion of women than of men". He points out that a similar ratio of 10:9 was addressed by Lord Nicholls in the House of Lords in Seymour-Smith No 2

[2000] ICR 244

at 258, and that, although, in the event, the House, by a 3:2 majority, decided that this difference in proportion was considerable, differing from the European Court and the Divisional Court in that regard, it was only because of the additional features not present in this case (referred to below), which persuaded the majority of their Lordships.

[47]It seems to us clear, from the authorities cited to us, that the Employment Tribunal was at least entitled, if not obliged, to look at all the factors and all the figures and calculations and make of it what it could. We derive this from Seymour-Smith in the Divisional Court at 904-6 per Balcombe LJ and 914 F-G per McCullough J, and, in particular, from the helpful guidance of Lindsay P in Rutherford in the EAT (

[2002] ICR 123

), which does not appear to us to have been doubted in the Court of Appeal:

"18. Where does this leave us? Again leaving aside the case where a smaller but persistent constant disparity appears, we believe the authorities are to be synthesised and may be extended as follows: (i) There will be some cases where, on the statistics, a disparate impact is so obvious that a look at numbers alone or proportions alone, whether of the advantaged (qualifiers) or disadvantaged (non-qualifiers) will suffice beyond doubt to show that members of one sex are substantially or considerably disadvantaged in comparison with those of the other. (ii) However, in less obvious cases it will be proper for an employment tribunal, as the national court of fact, to use more than one form of comparison, no one of which is necessarily to be regarded as on its own decisive. (iii) In such less obvious cases it will be proper for the employment tribunal to look not merely at proportion (as proportions alone can be misleading) but also at numbers, and to look at both disadvantaged and non-disadvantaged groups and even to the respective proportions in the disadvantaged groups expressed as a ratio of each other. (iv) It will never be wrong for a tribunal to look at more than one form of comparison, if only to confirm that the case remains as obvious as it at first appeared. Moreover if there is any doubt as to the obviousness of the case, the tendency should always be to look at a second or further form of comparison. … (vii) The employment tribunal, in … less obvious cases, after looking in detail at such figures as should have been laid before it, must then stand back, as it were, and assimilating all figures, judge whether the apparently neutral provision, criterion or practice has a disparate impact, be it on men or women, that could fairly be described as considerable or substantial."

[48]This is consistent with the judgment of the European Court in Seymour Smith

[1999] ICR 447

at 489-492, and with the approval by the Court of Appeal per Potter LJ in London Underground Ltd v Edwards No 2

[1999] ICR 494

at 504-5, of the submissions of Mr Allen QC in that case that "the approach to the disparate impact question should not be formulaic at any stage".

[49]The Jones formula may or may not have been helpful in this case, but it seems that the Employment Tribunal did not draw any assistance from it. They based themselves on the other two calculations in reaching their conclusions:

"80. The Applicants' position was that in assessing whether the PCP was to the detriment of a considerably large proportion of women than men the Tribunal should assess the proportion of women and men affected, recognising that there should be an equal balance of advantage and disadvantage as construed by ECJ jurisprudence. The Respondent's position was that the Tribunal should unequivocally focus on the disadvantaged group and the proportions of men and women within it. We reminded ourselves of the authorities, the Treaty and directive referred to by the parties. 81. We note that Council Directive 1997/80/EC on the Burden of Proof in cases of discrimination based on sex, where the third recital provided that "action should be intensified to ensure the implementation of the principal of equality for men and women …"

We note also the contents of Articles 1, 2 and 6 of that directive, in particular that the aim of that directive is that the measures taken to implement the principal of equal treatment should be made more effective and the provision for non-regression. We had particular regard to R v Secretary of State for Employment ex-parte Seymour-Smith and another

[1999] ICR 147

with the emphases therein on different pools for comparison, London Underground Limited v Edwards (No.2) [1999] IC 494 with the emphasis on tribunals considering more than just statistical information in appropriate cases, and Harvest Town Circle v Rutherford

[2002] ICR 123

, in particular the synthesis set out in paragraph 18 of that decision. In applying that synthesis and in particular paragraph 18(vii) of it, we focus on the disadvantaged group. 82. The proportions of men and women in the disadvantaged group in table 'D' are 90.28% men and 98.55% women. Comparing one to another provides a proportion of 0.92. In itself we consider this to be a significant difference. We looked at the proportion of men and women in the advantaged group i.e. 9.72% and 1.45% respectively which when compared to each other is a ration of 6.7. While the numbers of employees in the advantaged group are comparatively small having regard also to the numbers of the male and female employees in the disadvantaged group we consider the proportion of women in the disadvantaged group to be significant and thus the PCP to require justification."

[50]Mr Underhill QC submits as follows:50.1 The Employment Tribunal erred in law in not ignoring the so-called impact on the advantaged group . As he put it in his skeleton argument "because very few of the cabin crew of either sex were employed pre-1.11.71, nearly everyone is disadvantaged by the PCP; but the proportion of women disadvantaged is a little higher." Given that the difference between 1.45% and 9.72% is simply the mirror image of that between 98.55% and 90.28%, on the facts of this case where the advantaged group is so insignificant, the requirement for the difference in proportion to be considerable requires a focus only on the disadvantaged group. We do not agree that this is required as a matter of law. It is in all the circumstances a matter entirely for the Employment Tribunal. We agree with Mr Allen QC that the Tribunal can look at all the facts and figures, all the statistics and differences, small and large, in accordance with the helpful guidance of Lindsay P, and make up its own mind. The larger group may very often be the main focus (as implied by Mummery LJ in Rutherford at 190 paragraph 25) but the approach is left to the Tribunal.

50.2 His alternative submission is that the Tribunal is perverse. In this regard he refers to the smallness of the advantaged group and to the similar ratio of 10:9 in Seymour Smith , where what tipped the balance, and then only by a majority, was, according to the speech of Lord Goff at 254D "the central question … whether … the statistical evidence had revealed "a lesser but persistent and relatively constant disparity over a long period". In this regard Mr Underhill refers to paragraph 83 of the Judgment to which we have referred above:

"Any scheme or policy which requires continuity of employment for lengthy periods of time requires stability in employment. While we are aware from our own knowledge that people of both sexes change jobs for many reasons during their working life it is mainly women who have career breaks for family reasons. To that extent we consider the PCP to have an inherently discriminatory impact on women although we do not have any specific information, other than in relation to Ms Leckenby, on the effect of that impact. We accept the Respondent's submission, however, that as at 1 November 1971 there was nothing inherently gender disproportionate in the changes introduced at that time. We observe also that there will come a time when the PCP will cease to have a significant, and later any, disproportionate impact. "

[51]Mr Underhill points out that the Tribunal was looking at a snapshot as at 2002, and where, as here, the PCP consists of the non-entitlement of a very substantial present day group to benefits enjoyed by a closed historic group, that historic group may have consisted of men and women equally: may have reduced over time non-discriminatorily, while the post-1971 group may have achieved its present substantial disproportion in favour of women by positive recruitment; and will in due course disappear entirely. He submits that there is nothing inherently discriminatory in what has historically occurred, that the Employment Tribunal has inappropriately compared what has occurred to a length of service provision, and that there is no inherently discriminatory impact on women resulting from it.

[52]We agree with Mr Underhill that paragraph 83 is inadequately founded or reasoned. However, in our judgment, the view expressed by the Employment Tribunal in paragraph 83 of the Judgment was not central to its decision, and its conclusions by reference to adverse impact in paragraphs 81 and 82 can and do stand alone. In those paragraphs they are carrying out the tasks required of them by Lindsay P in Rutherford in what he calls, in his subparagraphs (iii) and (vii), the "less obvious cases", i.e. those which are not inherently discriminatory; and they make this clear by their express reference to sub-paragraph (vii) in what they call Lindsay P's "synthesis" in paragraph 81 of the Judgment. If the Tribunal had simply looked at the disadvantaged group they might have found themselves in the borderline area referred to by Lord Nicholls. Even in such a case it would be, as Lord Nicholls himself made clear at 258H, one of "degree" and "impression". That degree and impression was for the Employment Tribunal. In any event, the Tribunal did not limit itself to looking at the disadvantaged group , but looked also at the advantaged group, directing itself properly in doing so. We do not conclude that the Tribunal was perverse.

[53]In those circumstances we return to consider the use of the incorrect words by the Tribunal in paragraph 82 of the Judgment. We are satisfied that their use of the wrong phraseology did not cause them to come to a conclusion different from that which they were entitled to come had they used the words "considerably larger" rather than "a significant difference". Justification

[54]The Employment Tribunal concluded that BA satisfied the burden of justification within s1(2)(b)(ii) of SDA . They carried out the weighing exercise which is required, and is often called the Hampson test by reference to the judgment of Balcombe LJ in Hampson v Department of Education and Science

[1989] ICR 179

at 181: see per Sedley LJ in Allonby v Accrington College

[2001] ICR 1189

at 1200 para 24, referring to Rainey v Greater Glasgow Health Board

[1987] ICR 129

HL and Webb v EMO Air Cargo (UK) Ltd

[1993] ICR 175

HL at 182, and to Barry v Midland Bank plc

[1999] ICR 859

. Balcombe LJ in Hampson at 191 said:

"In my judgment 'justifiable' requires an objective balance between the discriminatory effect of the condition and the reasonable needs of the party who applies the condition"

. Lord Nicholls amplified this in his speech in Barry at 870 D-F as follows:

"More recently, in Enderby v Frenchay Health Authority (Case C-127/92) [1994] ICR 112 , 163 the Court of Justice drew attention to the need for national courts to apply the principle of proportionality when they have to apply Community law. In other words, the ground relied upon as justification must be of sufficient importance for the national court to regard this as overriding the disparate impact of the difference in treatment, either in whole or in part. The more serious the disparate impact on women or men as the case may be, the more cogent must be the objective justification. There seem to be no particular criteria to which the national court should have regard when assessing the weight of the justification relied upon. "

[55]The Tribunal put into the weighing exercise on one side, before considering the justifications advanced by BA, the discriminatory PCP. They were entitled to take into account both that the PCP arose out of the pre-1971 position relating to the surviving 586 employees and not out of any policy expressly imposed upon the 12,591 post-1971 employees, and the proportion of 10:9 in the disadvantaged group, borderline or otherwise. The Tribunal described its exercise as follows at paragraph 84 of the Judgment:

"We considered whether the Respondent had justified the PCP. We were referred by the parties to Allonby. We had regard to that decision and the other authorities to which we were referred, in particular Barry v Midland Bank plc [1997] ICR 319. From those authorities we recognise we must apply an objective test to the question of whether the Respondent's actions were justified irrespective of the Applicants' sex. In doing so we consider whether the objective of the scheme is legitimate, whether the means chosen to achieve that end are appropriate and reasonably necessary to achieve the end, although it is not necessary for the means chosen to be the only possible means. This involves a balancing exercise, the more serious the disparate impact the more cogent must be the justification. While we consider the disparity of impact crosses the threshold, because of the small numbers of employees in the advantaged group; the benefits which accrue from the PCP; and the numbers of employees (estimated from the Collinson Grant study) who would wish to pursue the ability to work beyond age 55 to 60, we consider the discriminatory impact to weigh lightly in the balance. The Respondent sought to justify the maintenance of the PCP by reference to its economic and organisation business interests."

[56]Mr Allen QC did not challenge the appropriateness of there being such weighing exercise, but he had two substantive objections. The first was that the PCP is so tainted by sex discrimination that no justification can be put forward which will be "irrespective of the sex of the person to whom it is applied". This is upon the basis that at the time when the retained protection for the pre-1971 employees was negotiated and formulated, i.e. before the 1975 Act , the provision applied to those pre-1971 employees was plainly discriminatory, because the age was, as set out in paragraph 4.2 above, 60 for men and 35 for women. The retention of the age of 60 for pre-1971 employees, as opposed to the new BA age of 55, was thus in 1971 solely for the benefit of male pre-1971 employees. Hence Mr Allen QC submits in his skeleton (paragraph 123):

"Accordingly the Employment Tribunal ought to have found that the policy criterion or practice based on distinguishing between those who were employed before or after 1 November 1971 was tainted by sex discrimination since at the time it was negotiated it was negotiated solely for men and not for women."

[57]We are satisfied that this argument does not succeed in preventing reliance by BA upon its justifications put forward to the Employment Tribunal and included in the weighing exercise:57.1 The test as to the PCP is not as to the validity of the rule for the pre-1971 employees, but of the PCP that post-1971 employees are not eligible for it – it is the discriminatory feature of that (10:9 in the disadvantaged group) which is sought to be justified, not the original rule for the pre-1971 employees.

57.2 The pre-1971 rule to which the post-1971 employees are being denied access is, in any event, not as it started in 1971, but as it has been since 1975 – 60 for both men and women.

57.3 In any event, the time for the justification of the PCP by BA is as at 2001, and not by reference to the origin or history of the PCP or, in this case, the benefit to which, as a result of the PCP, the claimants are not entitled. This is plain from the European Court judgment in Schönheit v Stadt Frankfurt am Main

[2004] IRLR 983

at paragraphs 86 and 87:

"86. However, a difference in treatment between men and women may be justified, depending on the circumstances, by reasons other than those put forward when the measure introducing the differential treatment was adopted. 87. It is for the Member State which has introduced such a measure, or the party to the main proceedings who invokes it, to establish before the national court that there are objective reasons unrelated to any discrimination on grounds of sex such as to justify the measure concerned … and they are not bound in that respect by the intention expressed when the measure was adopted."

[58]The second fundamental objection by Mr Allen QC is as to the Tribunal's treatment in law as to what justification was entitled to be taken into account in the weighing exercise. A number of justifications were put forward by BA. The Tribunal did not accept them all. They rejected the three described in paragraphs 99 to 101 and 107 of the Judgment. They also rejected a justification based upon detriment to the promotion opportunities of more junior employees, as set out in paragraph 98 of the Judgment. With regard to the first three, Mr Underhill QC has not sought to challenge the Employment Tribunal. As to the fourth, the detriment to the promotion opportunities, he does challenge the Employment Tribunal's conclusion, and we shall return to this below. The Tribunal found, however, two significant justifications, as summarised in paragraph 108 of the Judgment:

"We consider that the Respondent's aim of minimising its costs, particularly in the financial situation it finds itself in, and maintaining the existing terms and conditions of employment so far as they relate to retirement and access to pensions affected by the PCP are legitimate. Together we consider the maintenance of the PCP appropriate to that end. Having regard to the weight of the discriminatory impact, we consider the Respondent's actions are reasonably necessary to achieve that end. We consider the PCP is justified irrespective of the Applicants' sex."

[59]The fundamental objection by Mr Allen QC is to the inclusion of costs as a justification at all. If that objection be right, and the Tribunal was not entitled in law to include such justification in its weighing exercise, then the exercise would have to be redone, and the case remitted for a rehearing. He submits that it is impermissible for the Tribunal to have included costs as a justification.

[60]The Employment Tribunal sets out its conclusion on this point of law in paragraph 88 of the Judgment:

"The first of the non-historic reasons referred to by the Respondent in its Notices of Appearances, albeit not expressed as its main reason, is cost. This reason we find has been at the forefront of all considerations by the Respondent. The parties differed as to whether the costs could ever be a justifiable reason. We were referred by the Applicants to Hill v Revenue Commissioners [1999] ICR 48 , which provided that economic grounds on their own could never justify discrimination. We were referred also by the Respondent to Rainey … and Allonby, which dealt with economic issues as part of the reasons for discrimination. We are satisfied that economic (which includes cost) grounds can properly be a factor justifying indirect discrimination, if combined with other reasons."

[61]Mr Underhill QC would, if necessary, argue that the Employment Tribunal could have relied on costs alone as justification, but he is content to support its conclusion based upon "costs plus" i.e. costs and other justification too. Mr Allen QC repeats his submission, made unsuccessfully before the Employment Tribunal, that a Respondent cannot rely on costs as a justification at all.

[62]Mr Underhill QC refers to a number of cases where economic considerations, either the same as or analogous to costs, have been permitted or envisaged as justification, and Mr Allen QC has incorporated them into a comprehensive overview of the relevant cases. We shall deal below with the four most material:62.1 Jenkins v Kingsgate Ltd

[1981] ICR 592

(ECJ): the justification included maximising the use of expensive machinery and encouraging productivity. Mr Underhill QC says this is a saving of costs, or economic reasons. Mr Allen QC says it is an efficient use of capital and labour.

62.2 Bilka-Kaufhaus v Weber von Hartz

[1987] ICR 110

(ECJ): justification includes (122 G-H) the fact that employment of full time workers rather than part time workers "entails lower ancillary costs and permits the use of staff throughout opening hours". The Court concluded: "it is for the national court, which has sole jurisdiction to make findings of fact, to determine whether and to what extent the grounds put forward by an employer to explain the adoption of a pay practice which applies independently of a worker's sex but in fact affects more women than men may be regarded as objectively justified economic grounds. If the national court finds that the measures chosen by Bilka correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objects pursued and are necessary to that end, the fact that the measures affect a far greater number of women than men is not sufficient to show that they constitute an infringement of Article 119" (para 36 at 126 E-F).

62.3 Rainey (HL): the justification included employing prosthetists at higher pay from the private sector (rather than for example uplifting the pay of NHS prosthetists): per Lord Keith at 235 E "… where there is no question of intentional sex discrimination whether direct or indirect … a difference which is connected with economic factors affecting the efficient carrying on of the employer's business or other activity may well be relevant".

62.4 Allonby (CA): per Sedley LJ, paragraph 28 at 1201, in consideration of what could be accepted by an employment tribunal as justification: "… the tribunal accepted uncritically the college's reasons for the dismissal. They did not, for example, ask the obvious question why departments could not be prevented from overspending on part-time hourly-paid teachers without dismissing them. They did not consider other fairly obvious measures short of dismissal which had been canvassed and which could well have matched the anticipated saving of £13,000 a year. In consequence they made no attempt to evaluate objectively whether the dismissals were reasonably necessary – a test which, while of course not demanding indispensability, requires proof of a real need".

[63]It seems to us, as a matter of obvious common sense (and in accordance with the principle of the concept of proportionality), and by way of example drawn from these cases, that, albeit that, in the weighing exercise, costs justifications may often be valued less, particularly if the discrimination is substantial, obvious and even deliberate, economic justification such as the saving, or the non-expenditure, of costs (which must, for example, include the avoidance of loss) must be considered. It would, in our judgment, need clear reasoning and binding authority to prevent that occurring.

[64]The first European decision upon which Mr Allen QC relies to establish his proposition that such economic considerations as the savings of costs (or the avoidance of expenditure) cannot be considered as justification, is De Wéerd, Nee Roks v Bestuur van de Bedrijfsvereniging voor de Gezondheid ("Roks") [1994] ECR 1-571. This was a social security case, related to the implementing of national measures subjecting the grant to married women of benefits for incapacity for work to a condition not previously applied to men. In considering what was permitted to Member States, Darmon A-G at para 58 (1-584) had opined that the relevant Directive did not preclude the application of national legislation of the kind complained of "provided that it is justified on budgetary grounds and accords with the nature of the scheme in question". The court did not agree (at 1-600):

"35. Nevertheless, although budgetary considerations may influence a Member State's choice of social policy and affect the nature or scope of the social-protection measures it wishes to adopt, they cannot themselves constitute the aim pursued by that policy and cannot, therefore, justify discrimination against one of the sexes. 36. Moreover, to concede that budgetary considerations may justify a difference in treatment as between men and women which would otherwise constitute indirect discrimination on grounds of sex, which is prohibited by Article 4(1) of Directive 79/7, would be to accept that the application and scope of as fundamental a rule of Community law as that of equal treatment between men and women might vary in time and place according to the state of the public finances of the Member States. 37. Finally, as the Court has stated in connection with the second question, Community law does not prevent Member States from taking budgetary constraints into account when making the continuance of entitlement to a social security benefit dependent on conditions the effect of which is to withdraw the benefit thereof from certain categories of persons, provided that when they do so they do not infringe the rule of equal treatment as between men and women laid down in Article 4(1) of Directive 79/7. 38. The reply to the third question must therefore be that Article 4(1) of Directive 79/7 precludes the application of national legislation which makes the grant of benefits for incapacity for work subject to the condition of having received some income during the year preceding the commencement of the incapacity, a condition which, although it does not distinguish on grounds of sex, affects far more women than men, even if the adoption of that national legislation is justified on budgetary grounds. "

No reference is made in that case to Jenkins or Bilka .

[65]The next authority to which Mr Allen QC refers is Hill v Revenue Commissioners

[1991] ICR 48

(ECJ). This was a case relating to a comparison between full-time and part-time civil servants in Ireland. Five justifications were put forward by the Irish Revenue Commissioners and Department of Finance, as recorded in the opinion of La Pergola A-G at para 39 (62F-H). The first four, to which the letters (a) to (d) were assigned, were non-economic justifications and, on their facts, were dismissed by the A-G. He then turned to (e), which justification was said to be that "the present practice ensures that the incremental cost of job-sharing staff is the same as that of full-time staff, thus making the cost of work done by job-sharers the same as the cost of work done by full-time staff". The A-G opined at paragraph 44 (64 C-D) "nor, lastly, am I persuaded by the justification concerning the administration's financial needs", for reasons there given. The Full Court's judgment deals with the justifications put forward, at paragraphs 36ff on page 70. It too rejects the first four justifications, and then, at paragraph 40, states as follows:

"So far as the justification based on economic grounds is concerned, it should be noted that an employer cannot justify discrimination arising from a job-sharing scheme solely on the ground that avoidance of such discrimination would involve increased costs."

[66]It consequently rejected the justification claim. This is the first place in which the word "solely" arises in this context in a judgment of the European court so far as we have been told. It would appear to arise in the context of the four other justifications being rejected.

[67]Mr Allen's next case is Kütz-Bauer v Freie und Hansestadt Hamburg

[2003] IRLR 368

(ECJ). The City of Hamburg, as employer, made discriminatory conditions on access to part time working. The court concluded, at 698, as follows:

"59. As regards the German Government's argument concerning the additional burden associated with allowing female workers to take advantage of the scheme at issue in the main proceedings even where they have acquired entitlement to a retirement pension at the full rate, the Court observes that although budgetary considerations may underlie a Member State's choice of social policy and influence the nature or scope of the social protection measures which it wishes to adopt, they do not in themselves constitute an aim pursued by that policy and cannot therefore justify discrimination against one of the sexes (case C-343/92 De Weerd and Others [1994] ECR 1-571, paragraph 35). 60. Moreover, to concede that budgetary considerations may justify a difference in treatment between men and women which would otherwise constitute indirect discrimination on grounds of sex would mean that the application and scope of a rule of Community law as fundamental as that of equal treatment between men and women might vary in time and place according to the state of the public finances of Member States (De Weerd and Others, cited above, paragraph 36 and Jørgensen, cited above, paragraph 39). 61. Nor can the City of Hamburg, whether as a public authority or as an employer, justify discrimination arising from a scheme of part-time work for older employees solely because avoidance of such discrimination would involve increased costs (see, to that effect, Hill and Stapleton, paragraph 40)."

[68]In Steinicke v Bundesanstalt für Arbei t

[2003] IRLR 892

(ECJ) a national body, the Federal Labour Office, made discriminatory pre-conditions for part time working in relation to its civil servants. The European Court repeated virtually word for word its judgment in Kütz-Bauer , at 897:

"67. Moreover, to concede that budgetary considerations may justify a difference in treatment between men and women which would otherwise constitute indirect discrimination on grounds of sex would mean that the application and scope of a rule of Community law as fundamental as that of equal treatment between men and women might vary in time and place according to the state of the public finances of Member States (Roks and Others paragraph 36, and Kütz-Bauer paragraph 60). 68. Nor can the Bundesanstalt für Arbeit, whether as a public authority or as an employer justify discrimination arising from a scheme of part time work for older employees solely because elimination of such discrimination would involve increased costs (Kütz-Bauer paragraph 61)."

[69]Finally Schönheit , referred to in paragraph 57.3 above (ECJ). Mr Allen QC explains the facts of this complicated case as follows:

"in essence up to a certain date German state employers applied a pension abatement to certain part time workers, so that they received a lesser pension than a full time worker who carried out the same amount of work albeit over a shorter period … the justification for this rule was identified by the referring court as being to limit public expenditure"

. The European Court concluded as follows at 991:

"84. It must be observed at the outset that the aim of restricting public expenditure, which, according to the national court, was invoked by the State when the pension abatement first became part of national law, cannot be relied upon for the purpose of justifying a difference in treatment on grounds of sex. 85. The Court has already held that budgetary considerations cannot justify discrimination against one of the sexes. To concede that such considerations may justify a difference in treatment between men and women which would otherwise constitute indirect direct discrimination on grounds of sex would mean that the application and scope of a rule of Community law as fundamental as that of equal treatment between men and women might vary in time and place according to the state of the public finances of Member States (Roks, paragraphs 35 and 36 …and Kütz-Bauer paragraphs 59 and 60)."

It is noteworthy that there is no reference to paragraph 61 of Kütz-Bauer or its identical repetition in paragraph 68 of the judgment in Steinicke .

[70]It seems to us a clear and understandable proposition that a Government, with its notionally bottomless purse, cannot be permitted to justify a social policy which is obviously discriminatory, on grounds of costs. Mr Underhill QC says this is what Roks and the first of the twin paragraphs in Kütz-Bauer (paragraph 60) - repeated, together with its twin, in Steinicke (paragraph 67), and without its twin in Schönheit (paragraph 85) - relates to. He submits that the second of the twin paragraphs, paragraph 61 in Kütz-Bauer and paragraph 68 in Steinicke , both clearly derived from Hill , is concerned with the position of an employer seeking to rely on justification: and the distinction in relation to this second set of paragraphs hangs on the insertion of the word "solely". He has a submission about the meaning of the word solely , if necessary, which would lead him to challenge the Employment Tribunal's interpretation in paragraph 88 of the Judgment, namely that solely could mean "without more" or "without more explanation". But he does not pursue that submission before us, and is content to support the conclusion of the Employment Tribunal, as set out in paragraph 60 above. He submits, consequently, that the Employment Tribunal was right in its conclusion that it was open to an employer, be it public or private, to rely, as part of its justification, on cost, providing that cost was not the sole justification. The Roks principle, applying to public and social policy decisions by national bodies, and followed through the first of the twin paragraphs in each of Kütz-Bauer and Steinicke into Schönheit , is not relevant to the case considered here, where a private employer is seeking to justify not removing a discriminatory PCP.

[71]Mr Allen QC submits that (taking Kütz-Bauer as the seminal example), the second paragraph, 61, is simply repetitious of the first paragraph, 60. Consequently the Roks principle, as enshrined in paragraph 60, prevails, and paragraph 61 is not intended to say anything different, and the word solely should not be given any substantive meaning. It should simply be read as if it meant "simply" or "just".

[72]We disagree. We note the authorities in paragraph 62 above. As to the European decisions relied upon by Mr Allen, it is clear to us that paragraph 61 of Kütz-Bauer , and the word solely , derive from Hill , where it can be clearly seen how solely arises, i.e. on the basis of the European Court's decision in that case that, if the only justification is cost, then the justification cannot stand, having dismissed all four other justifications. Paragraph 61 therefore falls to be contrasted with paragraph 60 in Kütz-Bauer , because paragraph 61 is derived from Hill , as the citation expressly says, while paragraph 60 is expressly derived from Roks . Further it is clear to us from the structure of the paragraphs that the use of the word "nor" at the outset of the second paragraph (as also in the second paragraph in the pair, upon their repetition in Steinicke ), represents the making of a further proposition, and not simply a repetition of the earlier proposition. We conclude that the European Court has laid down a perfectly comprehensible structure. A national state cannot rely on budgetary considerations to justify a discriminatory social policy. An employer seeking to justify a discriminatory PCP cannot rely solely on considerations of cost. He can however put cost into the balance, together with other justifications if there are any. We do not consider it necessary to make a reference to the European Court.

[73]In those circumstances we conclude that the Employment Tribunal's analysis of European law, although very much more concise than that in this judgment, in the light of what may well have been fuller argument, was correct. It found that the cost justification put forward by BA was both appropriate in law to be considered, because it was satisfied that it was not the sole justification, and, on analysis, persuasive in the weighing exercise. It is to those conclusions that we now finally turn.

[74]The Tribunal dealt with the issue of costs in paragraphs 88 to 97 of the Judgment. On the assumption that costs are to be considered as justification, the Claimants put a short case on perversity. They allege that the Employment Tribunal should have taken into account that the cost of introducing the changes, referred to in paragraph 3 above, was only a small percentage of BA's total salary bill and an even smaller percentage of its total annual turnover. This is a matter however which the Tribunal expressly took into account in paragraph 97. There is no basis upon which we could conclude that the Employment Tribunal was perverse.

[75]The Claimants then assert that the Tribunal was not entitled to reach the conclusion it did as to justification by reference to the impact of the changes required on the BA pension arrangements. This was adumbrated in Cabin Crew News, as set out in paragraph 2 above, and became the subject of very considerable evidence before the Employment Tribunal. The Tribunal made findings as to the facts in paragraphs 60 to 68 inclusive of the Judgment. Its conclusions in paragraphs 104 to 106 are as follows:

"104. The effect of allowing late retirement to considerable numbers of cabin crew would place the Inland Revenue approval of NAPS in jeopardy, the larger the numbers the more the jeopardy because of the effect on the PNRA. The alternative would be to change NAPS to provide for PNRA age of 60. This, however, is not what the majority of cabin crew appear to want, nor does the Respondent (although it has no objection in principle). This would also do away with the change which the Respondent and the trade unions have made to the contractual retirement age and PNRA and at the time when that disparity is diminishing. 105. The Respondent can cause NAPS to be changed. If it did so the post 1971 employees would need to be given a one off choice to raise the contractual and PNRA to 60. It would be necessary for those employees who elected for a contractual and PNRA of 60 to continue to work until age 60 in order to receive their full pension or if they retired before that age suffer an actuarial reduction. It would also be possible for employees to elect to retain their contractual retirement age and consequentially PNRA of 55. If NAPS was changed new cabin crew would have a contractual and PNRA of 60 with no option of retirement on pension at 55 without actuarial reduction. These changes would be very unpopular with many of the cabin crew and was not what the Respondent or the trade unions sought. 106. For these reasons we consider the detriment to the majority of the cabin crew caused by a change in a contractual and PNRA which would be necessitated by the removal of the PCP to be significant. The reference in these paragraphs to PNRA is to "

Pensionable Normal Retirement Age", being that provided in the relevant pension scheme to be the normal retirement age for the purposes of the scheme, and NAPS is the "New Airways Pension Scheme".

[76]Mr Allen QC's submissions are largely within the province of perversity, but they have two particular focuses:76.1 He complains that the conclusions of the Employment Tribunal are not based upon direct evidence from the Inland Revenue, but based upon BA's belief as to the position which the Inland Revenue would take to the review, which it appears common ground would be rendered necessary by virtue of Rule 4 of NAPS, given the wholesale change to the CRA and probably the NRA of BA employees resulting from what the Claimants seek, by reference to s590 and the discretionary powers under s591 of the Income and Corporation Taxes Act 1988 (" ICTA ") and regulations made by reference to s591(5). The conclusion of the Employment Tribunal was based upon detailed oral evidence from Mr Birch, Managing Director of British Airways Pensions Services Ltd and Secretary of the two relevant pension schemes, including NAPS, and from Mr Howells, Manager of Crew Agreement and Operations with the Respondent, and upon an apparently inconsistent exchange of correspondence with the Inland Revenue adduced by each side: the Employment Tribunal did not allow BA to introduce a yet further letter from the Inland Revenue, adduced at a late stage, which, it asserted, would have resolved any inconsistency. The Claimants adduced no oral evidence.

76.2 In particular Mr Allen QC criticised the use of the words by the Tribunal in paragraph 106 of the Judgment as to detrimental change in the CRA and PRNA "which would be necessitated" by the removal of the PCP.

[77]We are wholly satisfied that the Employment Tribunal was entitled to accept the evidence of the BA witnesses and its interpretation of the correspondence with the Revenue as to what was likely to occur. The Tribunal having been so satisfied, evidence which began with the informed belief of BA ended with a conclusion by the Employment Tribunal, on the balance of probabilities, as to the fact that the change would be necessitated. There is, in our judgment, no basis for challenge to the Employment Tribunal's conclusion. No error of law is disclosed by reference to its approach to the evidence as to what was likely, taking into account the provisions of ICTA , and no case of perversity is established.

[78]The Employment Tribunal found, for the purpose of the "costs plus" argument (see paragraph 61 above), that the only matters of justification to go into the weighing exercise were the issues of costs and the impact on the pension schemes: these were sufficient, in the judgment of the Employment Tribunal, to outweigh the discriminatory impact of the PCP (paragraphs 84 and 108 of the Judgment). However, if necessary, BA would seek to bring in a further justification, namely as to detriment to promotion opportunities (as referred to in paragraph 58 above). Findings of fact were made in paragraph 69, and the Tribunal's conclusion was in paragraph 98, of the Judgment:

"Should cabin crew work beyond 55, this would affect the opportunities for promotion of more junior employees. If cabin crew worked beyond rather than retired at age 55, more junior cabin crew would have to wait for longer periods than at present before they could be considered for, and possibly obtain, promotion with the benefits that flow from it. We accept that the cabin crew's expectation of prospects for promotion are genuine and are part of the Respondent's culture. While we consider that … effect of removing the PCP to be significant, we do not regard it as a justification in whole or in part for the maintenance of the discriminatory impact of the PCP."

This last sentence is at best opaque. Mr Allen submits that there is a reason, unspecified by the Tribunal, which could be relied upon to cast doubt on the detriment to promotion opportunity, namely by reference to the existence in the BA Equal Opportunities Policy of a provision that BA would promote people solely on the basis of merit. But it is unclear how this is an answer, not least in the light of the specific findings made by the Tribunal that removing the PCP would have a significant effect in that regard and that the approach to promotion opportunity, even if bottomed on the Equal Opportunities Policy, was nevertheless "part of the Respondent's culture". Mr Underhill submits that this paragraph is not "Meek-compliant", by reference to Meek v City of Birmingham

[1987] IRLR 250

. Had it been necessary for determination, we would have thought it appropriate at the very least to seek further reasons from the Employment Tribunal, or encourage a review in the absence of such reasons, in accordance with English v Emery Reimbold & Strick Ltd

[2002] 1 WLR 2409

[2003] IRLR 710

and Burns v Consignia plc (No 2)

[2004] IRLR 425

. However we are satisfied that, in the light of the conclusion of the Employment Tribunal, even without that aspect of justification, there is no call for any such course to be taken. The Piggy-Back Claim

[79]This is referred to in paragraph 4.3 above.

[80]It is an ingenious claim. The Tribunal's simple answer was that:

"113. We find that Mr Malone was retired because all employees in his position were retired when they reached age 55, be they male or female. There are no facts from which we could conclude that his retirement was on the ground of his sex. 114. Whatever our conclusion on the complaints of Ms Leckenby, Ms Young and Mrs Gibson may have been, they could not change the reason for Mr Malone's compulsory retirement. We therefore find that Mr Malone's complaint fails."

[81]Mr Allen QC sought to draw general assistance from European precepts underlying the Equal Treatment Directive and from dicta from the European Court in Marshall v Southampton and South West Hampshire Health Authority (Teaching) (No 2)

[1992] ICR 893

, a case relating to the payability of interest, particularly at paragraph 24, with regard to the need for measures designed to combat inequality having to be real and effective. But the question of effective remedy does not arise if there is no basis for a claim. He also sought before us, as he had before the Employment Tribunal, to rely on Hammersmith and Fulham London Borough Council v Jesuthasan

[1988] ICR 640

, but that was where restrictions on a right to claim redundancy and unfair dismissal were struck down, albeit at the instance of a woman, leaving a man free to make a claim in the absence of those restrictions. As the Tribunal pointed out "no legislation has been disapplied relevant to Mr Malone's complaint" (paragraph 109).

[82]In essence, Mr Malone's claim was at best premature. The Respondent says simply that in order for there to be liability for sex discrimination the Claimant must show (within s1(2)(a) of SDA ) that he had been treated less favourably than a woman on the grounds of his sex, and Mr Malone has simply not been so treated.

[83]Mr Allen seeks to raise an analogy from an equal pay claim. He refers to dicta of Otton LJ in Preston v Wolverhampton NHS

[1997] ICR 899

, at 922 to 924. In that case, although it was clear that men were not discriminated against, directly or indirectly, by the occupational pension schemes in question, and the claim was only that of women, contingent claims by men were not struck out on the basis that "a set of facts might, if some of the present women applicants were successful, arise in which it would be seen that men did not receive equal pay for equal work" (924B). But Mr Underhill persuasively explains, by reference to South Ayrshire Council v Milligan

[2003] IRLR 153

, that this is because of the statutory deemed equal pay clause built into a contract of employment by the equal pay legislation, giving a retrospective right to back pay. That mechanism is not here available.

[84]Mr Allen has indicated that, if unsuccessful in relation to this claim, he may be able to put forward in the future some case on post-employment discrimination by reference to Relaxion Group plc v Rhys-Harper

[2003] ICR 867

, although Mr Underhill joined issue as to that possibility. Whatever may be the case for the future, there is no doubt that, at present, Mr Malone has no claim.

[85]In any event the SDA claims have failed, so for that reason also Mr Malone has no claim, as there is no back upon which the piggy-backing exercise can be performed. In such circumstances, Mr Allen does not invite us to refer this last matter to Europe, but we would not have, in any event, been prepared to do so. Conclusion

[86]For all these reasons the appeal is dismissed.